Correlation Between Federated Institutional and Chartwell Small
Can any of the company-specific risk be diversified away by investing in both Federated Institutional and Chartwell 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 Federated Institutional and Chartwell Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Institutional High and Chartwell Small Cap, you can compare the effects of market volatilities on Federated Institutional and Chartwell 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 Federated Institutional with a short position of Chartwell Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Institutional and Chartwell Small.
Diversification Opportunities for Federated Institutional and Chartwell Small
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FEDERATED and Chartwell is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Federated Institutional High and Chartwell Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chartwell Small Cap and Federated Institutional 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 Federated Institutional High are associated (or correlated) with Chartwell Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chartwell Small Cap has no effect on the direction of Federated Institutional i.e., Federated Institutional and Chartwell Small go up and down completely randomly.
Pair Corralation between Federated Institutional and Chartwell Small
Assuming the 90 days horizon Federated Institutional is expected to generate 11.93 times less return on investment than Chartwell Small. But when comparing it to its historical volatility, Federated Institutional High is 9.38 times less risky than Chartwell Small. It trades about 0.2 of its potential returns per unit of risk. Chartwell Small Cap is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,783 in Chartwell Small Cap on August 31, 2024 and sell it today you would earn a total of 145.00 from holding Chartwell Small Cap or generate 8.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Institutional High vs. Chartwell Small Cap
Performance |
| Timeline |
| Federated Institutional |
| Chartwell Small Cap |
Federated Institutional and Chartwell Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Institutional and Chartwell Small
The main advantage of trading using opposite Federated Institutional and Chartwell Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Institutional position performs unexpectedly, Chartwell 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 Chartwell Small will offset losses from the drop in Chartwell Small's long position.The idea behind Federated Institutional High and Chartwell Small Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Chartwell Small vs. Ab High Income | Chartwell Small vs. Aqr Risk Balanced Modities | Chartwell Small vs. Federated Institutional High | Chartwell Small vs. Pioneer High Yield |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Stocks Directory Find actively traded stocks across global markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |