Correlation Between Fam Equity-income and Conestoga Smid
Can any of the company-specific risk be diversified away by investing in both Fam Equity-income and Conestoga Smid 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 Fam Equity-income and Conestoga Smid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fam Equity Income Fund and Conestoga Smid Cap, you can compare the effects of market volatilities on Fam Equity-income and Conestoga Smid 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 Fam Equity-income with a short position of Conestoga Smid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fam Equity-income and Conestoga Smid.
Diversification Opportunities for Fam Equity-income and Conestoga Smid
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fam and Conestoga is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Fam Equity Income Fund and Conestoga Smid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conestoga Smid Cap and Fam Equity-income 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 Fam Equity Income Fund are associated (or correlated) with Conestoga Smid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conestoga Smid Cap has no effect on the direction of Fam Equity-income i.e., Fam Equity-income and Conestoga Smid go up and down completely randomly.
Pair Corralation between Fam Equity-income and Conestoga Smid
Assuming the 90 days horizon Fam Equity-income is expected to generate 1.82 times less return on investment than Conestoga Smid. But when comparing it to its historical volatility, Fam Equity Income Fund is 1.58 times less risky than Conestoga Smid. It trades about 0.32 of its potential returns per unit of risk. Conestoga Smid Cap is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 2,542 in Conestoga Smid Cap on September 2, 2024 and sell it today you would earn a total of 250.00 from holding Conestoga Smid Cap or generate 9.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fam Equity Income Fund vs. Conestoga Smid Cap
Performance |
| Timeline |
| Fam Equity Income |
| Conestoga Smid Cap |
Fam Equity-income and Conestoga Smid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fam Equity-income and Conestoga Smid
The main advantage of trading using opposite Fam Equity-income and Conestoga Smid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fam Equity-income position performs unexpectedly, Conestoga Smid 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 Conestoga Smid will offset losses from the drop in Conestoga Smid's long position.| Fam Equity-income vs. Fam Value Fund | Fam Equity-income vs. Fam Small Cap | Fam Equity-income vs. Ycg Enhanced Fund | Fam Equity-income vs. Aegis Value Fund |
| Conestoga Smid vs. Conestoga Small Cap | Conestoga Smid vs. Ycg Enhanced Fund | Conestoga Smid vs. Df Dent Premier | Conestoga Smid vs. Polen Growth Fund |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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