Correlation Between Champlain Small and American Mutual
Can any of the company-specific risk be diversified away by investing in both Champlain Small and American Mutual 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 American Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Small Pany and American Mutual Fund, you can compare the effects of market volatilities on Champlain Small and American Mutual 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 American Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and American Mutual.
Diversification Opportunities for Champlain Small and American Mutual
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Champlain and American is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small Pany and American Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Mutual 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 Pany are associated (or correlated) with American Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Mutual has no effect on the direction of Champlain Small i.e., Champlain Small and American Mutual go up and down completely randomly.
Pair Corralation between Champlain Small and American Mutual
Assuming the 90 days horizon Champlain Small Pany is expected to generate 2.42 times more return on investment than American Mutual. However, Champlain Small is 2.42 times more volatile than American Mutual Fund. It trades about 0.33 of its potential returns per unit of risk. American Mutual Fund is currently generating about 0.12 per unit of risk. If you would invest 2,253 in Champlain Small Pany on August 28, 2024 and sell it today you would earn a total of 263.00 from holding Champlain Small Pany or generate 11.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champlain Small Pany vs. American Mutual Fund
Performance |
| Timeline |
| Champlain Small Pany |
| American Mutual |
Champlain Small and American Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and American Mutual
The main advantage of trading using opposite Champlain Small and American Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small position performs unexpectedly, American Mutual 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 American Mutual will offset losses from the drop in American Mutual's long position.| Champlain Small vs. Champlain Mid Cap | Champlain Small vs. Aberdeen Select International | Champlain Small vs. Marsico 21st Century | Champlain Small vs. Diamond Hill Large |
| American Mutual vs. Pace Smallmedium Growth | American Mutual vs. L Abbett Growth | American Mutual vs. Champlain Mid Cap | American Mutual vs. Franklin Growth Opportunities |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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