Correlation Between Champlain Small and Value Fund
Can any of the company-specific risk be diversified away by investing in both Champlain Small and Value Fund at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Champlain Small and Value Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Small and Value Fund A, you can compare the effects of market volatilities on Champlain Small and Value Fund and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Champlain Small with a short position of Value Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Value Fund.
Diversification Opportunities for Champlain Small and Value Fund
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Champlain and Value is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Value Fund A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Fund A and Champlain Small is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Champlain Small are associated (or correlated) with Value Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Fund A has no effect on the direction of Champlain Small i.e., Champlain Small and Value Fund go up and down completely randomly.
Pair Corralation between Champlain Small and Value Fund
Assuming the 90 days horizon Champlain Small is expected to generate 2.04 times more return on investment than Value Fund. However, Champlain Small is 2.04 times more volatile than Value Fund A. It trades about 0.11 of its potential returns per unit of risk. Value Fund A is currently generating about -0.06 per unit of risk. If you would invest 2,517 in Champlain Small on September 13, 2024 and sell it today you would earn a total of 57.00 from holding Champlain Small or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champlain Small vs. Value Fund A
Performance |
| Timeline |
| Champlain Small |
| Value Fund A |
Champlain Small and Value Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and Value Fund
The main advantage of trading using opposite Champlain Small and Value Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small position performs unexpectedly, Value Fund can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Value Fund will offset losses from the drop in Value Fund's long position.| Champlain Small vs. The Hartford Midcap | Champlain Small vs. Mfs Emerging Markets | Champlain Small vs. Wells Fargo Special | Champlain Small vs. Washington Mutual Investors |
| Value Fund vs. Pace Smallmedium Value | Value Fund vs. Cardinal Small Cap | Value Fund vs. Ab Small Cap | Value Fund vs. Champlain Small |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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