Correlation Between Chartwell Short and Eagle Small
Can any of the company-specific risk be diversified away by investing in both Chartwell Short and Eagle Small 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 Chartwell Short and Eagle Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chartwell Short Duration and Eagle Small Cap, you can compare the effects of market volatilities on Chartwell Short and Eagle Small 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 Chartwell Short with a short position of Eagle Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chartwell Short and Eagle Small.
Diversification Opportunities for Chartwell Short and Eagle Small
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chartwell and Eagle is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Chartwell Short Duration and Eagle Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Small Cap and Chartwell Short 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 Chartwell Short Duration are associated (or correlated) with Eagle Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Small Cap has no effect on the direction of Chartwell Short i.e., Chartwell Short and Eagle Small go up and down completely randomly.
Pair Corralation between Chartwell Short and Eagle Small
Assuming the 90 days horizon Chartwell Short is expected to generate 12.28 times less return on investment than Eagle Small. But when comparing it to its historical volatility, Chartwell Short Duration is 14.9 times less risky than Eagle Small. It trades about 0.25 of its potential returns per unit of risk. Eagle Small Cap is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 3,157 in Eagle Small Cap on August 24, 2024 and sell it today you would earn a total of 203.00 from holding Eagle Small Cap or generate 6.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chartwell Short Duration vs. Eagle Small Cap
Performance |
| Timeline |
| Chartwell Short Duration |
| Eagle Small Cap |
Chartwell Short and Eagle Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chartwell Short and Eagle Small
The main advantage of trading using opposite Chartwell Short and Eagle Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chartwell Short position performs unexpectedly, Eagle Small 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 Eagle Small will offset losses from the drop in Eagle Small's long position.| Chartwell Short vs. Blackrock High Yield | Chartwell Short vs. HUMANA INC | Chartwell Short vs. Aquagold International | Chartwell Short vs. Barloworld Ltd ADR |
| Eagle Small vs. Queens Road Small | Eagle Small vs. Pace Smallmedium Value | Eagle Small vs. Valic Company I | Eagle Small vs. Victory Rs Partners |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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