Correlation Between Continental Small and Us Small
Can any of the company-specific risk be diversified away by investing in both Continental Small and Us 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 Continental Small and Us Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Continental Small Pany and Us Small Cap, you can compare the effects of market volatilities on Continental Small and Us 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 Continental Small with a short position of Us Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental Small and Us Small.
Diversification Opportunities for Continental Small and Us Small
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Continental and DFSTX is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Continental Small Pany and Us Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Small Cap and Continental 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 Continental Small Pany are associated (or correlated) with Us Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Small Cap has no effect on the direction of Continental Small i.e., Continental Small and Us Small go up and down completely randomly.
Pair Corralation between Continental Small and Us Small
Assuming the 90 days horizon Continental Small Pany is expected to under-perform the Us Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Continental Small Pany is 1.74 times less risky than Us Small. The mutual fund trades about -0.27 of its potential returns per unit of risk. The Us Small Cap is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 4,892 in Us Small Cap on August 28, 2024 and sell it today you would earn a total of 462.00 from holding Us Small Cap or generate 9.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Continental Small Pany vs. Us Small Cap
Performance |
| Timeline |
| Continental Small Pany |
| Us Small Cap |
Continental Small and Us Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Continental Small and Us Small
The main advantage of trading using opposite Continental Small and Us Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Continental Small position performs unexpectedly, Us 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 Us Small will offset losses from the drop in Us Small's long position.| Continental Small vs. Intal High Relative | Continental Small vs. Dfa International | Continental Small vs. Dfa Inflation Protected | Continental Small vs. Dfa International Small |
| Us Small vs. Intal High Relative | Us Small vs. Dfa International | Us Small vs. Dfa Inflation Protected | Us Small vs. Dfa International Small |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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