Correlation Between Champlain Small and FT Cboe
Can any of the company-specific risk be diversified away by investing in both Champlain Small and FT Cboe 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 FT Cboe 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 FT Cboe Vest, you can compare the effects of market volatilities on Champlain Small and FT Cboe 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 FT Cboe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and FT Cboe.
Diversification Opportunities for Champlain Small and FT Cboe
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CHAMPLAIN and KNG is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small Pany and FT Cboe Vest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Cboe Vest 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 FT Cboe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Cboe Vest has no effect on the direction of Champlain Small i.e., Champlain Small and FT Cboe go up and down completely randomly.
Pair Corralation between Champlain Small and FT Cboe
Assuming the 90 days horizon Champlain Small is expected to generate 1.6 times less return on investment than FT Cboe. In addition to that, Champlain Small is 1.88 times more volatile than FT Cboe Vest. It trades about 0.01 of its total potential returns per unit of risk. FT Cboe Vest is currently generating about 0.04 per unit of volatility. If you would invest 4,544 in FT Cboe Vest on October 25, 2024 and sell it today you would earn a total of 539.00 from holding FT Cboe Vest or generate 11.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champlain Small Pany vs. FT Cboe Vest
Performance |
| Timeline |
| Champlain Small Pany |
| FT Cboe Vest |
Champlain Small and FT Cboe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and FT Cboe
The main advantage of trading using opposite Champlain Small and FT Cboe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small position performs unexpectedly, FT Cboe 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 FT Cboe will offset losses from the drop in FT Cboe'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 |
| FT Cboe vs. Global X SP | FT Cboe vs. Global X Nasdaq | FT Cboe vs. First Trust BuyWrite | FT Cboe vs. Amplify CWP Enhanced |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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