Correlation Between Chartwell Small and Aberdeen
Can any of the company-specific risk be diversified away by investing in both Chartwell Small and Aberdeen 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 Aberdeen 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 Aberdeen Multi Cap Equity, you can compare the effects of market volatilities on Chartwell Small and Aberdeen 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 Aberdeen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chartwell Small and Aberdeen.
Diversification Opportunities for Chartwell Small and Aberdeen
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chartwell and Aberdeen is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Chartwell Small Cap and Aberdeen Multi Cap Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Multi Cap 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 Aberdeen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Multi Cap has no effect on the direction of Chartwell Small i.e., Chartwell Small and Aberdeen go up and down completely randomly.
Pair Corralation between Chartwell Small and Aberdeen
Assuming the 90 days horizon Chartwell Small Cap is expected to generate 1.83 times more return on investment than Aberdeen. However, Chartwell Small is 1.83 times more volatile than Aberdeen Multi Cap Equity. It trades about 0.21 of its potential returns per unit of risk. Aberdeen Multi Cap Equity is currently generating about 0.16 per unit of risk. If you would invest 2,052 in Chartwell Small Cap on September 3, 2024 and sell it today you would earn a total of 249.00 from holding Chartwell Small Cap or generate 12.13% 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. Aberdeen Multi Cap Equity
Performance |
| Timeline |
| Chartwell Small Cap |
| Aberdeen Multi Cap |
Chartwell Small and Aberdeen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chartwell Small and Aberdeen
The main advantage of trading using opposite Chartwell Small and Aberdeen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chartwell Small position performs unexpectedly, Aberdeen 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 Aberdeen will offset losses from the drop in Aberdeen's long position.| Chartwell Small vs. Global Technology Portfolio | Chartwell Small vs. Dreyfus Technology Growth | Chartwell Small vs. Invesco Technology Fund | Chartwell Small vs. Firsthand Technology Opportunities |
| Aberdeen vs. Qs Moderate Growth | Aberdeen vs. T Rowe Price | Aberdeen vs. Rational Defensive Growth | Aberdeen vs. Champlain Mid Cap |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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