Correlation Between Champlain Small and Paradigm Value
Can any of the company-specific risk be diversified away by investing in both Champlain Small and Paradigm Value 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 Paradigm Value 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 Paradigm Value Fund, you can compare the effects of market volatilities on Champlain Small and Paradigm Value 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 Paradigm Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Paradigm Value.
Diversification Opportunities for Champlain Small and Paradigm Value
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Champlain and Paradigm is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small Pany and Paradigm Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paradigm Value 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 Paradigm Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paradigm Value has no effect on the direction of Champlain Small i.e., Champlain Small and Paradigm Value go up and down completely randomly.
Pair Corralation between Champlain Small and Paradigm Value
Assuming the 90 days horizon Champlain Small Pany is expected to generate 0.84 times more return on investment than Paradigm Value. However, Champlain Small Pany is 1.19 times less risky than Paradigm Value. It trades about 0.13 of its potential returns per unit of risk. Paradigm Value Fund is currently generating about 0.07 per unit of risk. If you would invest 2,078 in Champlain Small Pany on September 2, 2024 and sell it today you would earn a total of 408.00 from holding Champlain Small Pany or generate 19.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champlain Small Pany vs. Paradigm Value Fund
Performance |
| Timeline |
| Champlain Small Pany |
| Paradigm Value |
Champlain Small and Paradigm Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and Paradigm Value
The main advantage of trading using opposite Champlain Small and Paradigm Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small position performs unexpectedly, Paradigm Value 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 Paradigm Value will offset losses from the drop in Paradigm Value'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 |
| Paradigm Value vs. Royce Small Cap Value | Paradigm Value vs. Royce Smaller Companies Growth | Paradigm Value vs. Kinetics Paradigm Fund | Paradigm Value vs. Tcw Relative Value |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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