Correlation Between Chartwell Small and Vanguard Small-cap
Can any of the company-specific risk be diversified away by investing in both Chartwell Small and Vanguard Small-cap 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 Vanguard Small-cap 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 Vanguard Small Cap Index, you can compare the effects of market volatilities on Chartwell Small and Vanguard Small-cap 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 Vanguard Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chartwell Small and Vanguard Small-cap.
Diversification Opportunities for Chartwell Small and Vanguard Small-cap
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chartwell and Vanguard is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Chartwell Small Cap and Vanguard Small Cap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Small 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 Vanguard Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Small Cap has no effect on the direction of Chartwell Small i.e., Chartwell Small and Vanguard Small-cap go up and down completely randomly.
Pair Corralation between Chartwell Small and Vanguard Small-cap
Assuming the 90 days horizon Chartwell Small Cap is expected to generate 1.34 times more return on investment than Vanguard Small-cap. However, Chartwell Small is 1.34 times more volatile than Vanguard Small Cap Index. It trades about 0.25 of its potential returns per unit of risk. Vanguard Small Cap Index is currently generating about 0.31 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 | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Chartwell Small Cap vs. Vanguard Small Cap Index
Performance |
| Timeline |
| Chartwell Small Cap |
| Vanguard Small Cap |
Chartwell Small and Vanguard Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chartwell Small and Vanguard Small-cap
The main advantage of trading using opposite Chartwell Small and Vanguard Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chartwell Small position performs unexpectedly, Vanguard Small-cap 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 Vanguard Small-cap will offset losses from the drop in Vanguard Small-cap'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 |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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