Correlation Between Chartwell Small and Aama Equity
Can any of the company-specific risk be diversified away by investing in both Chartwell Small and Aama Equity 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 Small and Aama Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chartwell Small Cap and Aama Equity Fund, you can compare the effects of market volatilities on Chartwell Small and Aama Equity 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 Small with a short position of Aama Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chartwell Small and Aama Equity.
Diversification Opportunities for Chartwell Small and Aama Equity
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chartwell and Aama is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Chartwell Small Cap and Aama Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aama Equity Fund and Chartwell 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 Chartwell Small Cap are associated (or correlated) with Aama Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aama Equity Fund has no effect on the direction of Chartwell Small i.e., Chartwell Small and Aama Equity go up and down completely randomly.
Pair Corralation between Chartwell Small and Aama Equity
Assuming the 90 days horizon Chartwell Small Cap is expected to generate 2.29 times more return on investment than Aama Equity. However, Chartwell Small is 2.29 times more volatile than Aama Equity Fund. It trades about 0.25 of its potential returns per unit of risk. Aama Equity Fund is currently generating about 0.19 per unit of risk. If you would invest 2,094 in Chartwell Small Cap on August 30, 2024 and sell it today you would earn a total of 203.00 from holding Chartwell Small Cap or generate 9.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chartwell Small Cap vs. Aama Equity Fund
Performance |
| Timeline |
| Chartwell Small Cap |
| Aama Equity Fund |
Chartwell Small and Aama Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chartwell Small and Aama Equity
The main advantage of trading using opposite Chartwell Small and Aama Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chartwell Small position performs unexpectedly, Aama Equity 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 Aama Equity will offset losses from the drop in Aama Equity's long position.| Chartwell Small vs. Chartwell Short Duration | Chartwell Small vs. Carillon Chartwell Short | Chartwell Small vs. Chartwell Short Duration | Chartwell Small vs. Carillon Chartwell Short |
| Aama Equity vs. Ultrasmall Cap Profund Ultrasmall Cap | Aama Equity vs. Pace Smallmedium Value | Aama Equity vs. Ab Discovery Value | Aama Equity vs. Mid Cap Growth Profund |
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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