Correlation Between Eagle Capital and Chartwell Small
Can any of the company-specific risk be diversified away by investing in both Eagle Capital 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 Eagle Capital and Chartwell Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Capital Appreciation and Chartwell Small Cap, you can compare the effects of market volatilities on Eagle Capital 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 Eagle Capital with a short position of Chartwell Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Capital and Chartwell Small.
Diversification Opportunities for Eagle Capital and Chartwell Small
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eagle and Chartwell is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Capital Appreciation 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 Eagle Capital 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 Eagle Capital Appreciation 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 Eagle Capital i.e., Eagle Capital and Chartwell Small go up and down completely randomly.
Pair Corralation between Eagle Capital and Chartwell Small
Assuming the 90 days horizon Eagle Capital is expected to generate 2.69 times less return on investment than Chartwell Small. But when comparing it to its historical volatility, Eagle Capital Appreciation is 1.44 times less risky than Chartwell Small. It trades about 0.15 of its potential returns per unit of risk. Chartwell Small Cap is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 2,102 in Chartwell Small Cap on August 28, 2024 and sell it today you would earn a total of 221.00 from holding Chartwell Small Cap or generate 10.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Capital Appreciation vs. Chartwell Small Cap
Performance |
| Timeline |
| Eagle Capital Apprec |
| Chartwell Small Cap |
Eagle Capital and Chartwell Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Capital and Chartwell Small
The main advantage of trading using opposite Eagle Capital and Chartwell Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Capital 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.| Eagle Capital vs. Chartwell Short Duration | Eagle Capital vs. Carillon Chartwell Short | Eagle Capital vs. Chartwell Short Duration | Eagle Capital vs. Carillon Chartwell Short |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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