Correlation Between Paradigm Select and Scout Mid
Can any of the company-specific risk be diversified away by investing in both Paradigm Select and Scout Mid 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 Paradigm Select and Scout Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paradigm Select Fund and Scout Mid Cap, you can compare the effects of market volatilities on Paradigm Select and Scout Mid 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 Paradigm Select with a short position of Scout Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paradigm Select and Scout Mid.
Diversification Opportunities for Paradigm Select and Scout Mid
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Paradigm and SCOUT is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Paradigm Select Fund and Scout Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scout Mid Cap and Paradigm Select 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 Paradigm Select Fund are associated (or correlated) with Scout Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scout Mid Cap has no effect on the direction of Paradigm Select i.e., Paradigm Select and Scout Mid go up and down completely randomly.
Pair Corralation between Paradigm Select and Scout Mid
Assuming the 90 days horizon Paradigm Select Fund is expected to generate 1.1 times more return on investment than Scout Mid. However, Paradigm Select is 1.1 times more volatile than Scout Mid Cap. It trades about 0.05 of its potential returns per unit of risk. Scout Mid Cap is currently generating about 0.04 per unit of risk. If you would invest 5,968 in Paradigm Select Fund on November 27, 2024 and sell it today you would earn a total of 1,804 from holding Paradigm Select Fund or generate 30.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paradigm Select Fund vs. Scout Mid Cap
Performance |
| Timeline |
| Paradigm Select |
| Scout Mid Cap |
Paradigm Select and Scout Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paradigm Select and Scout Mid
The main advantage of trading using opposite Paradigm Select and Scout Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paradigm Select position performs unexpectedly, Scout Mid 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 Scout Mid will offset losses from the drop in Scout Mid's long position.| Paradigm Select vs. Paradigm Micro Cap Fund | Paradigm Select vs. Paradigm Value Fund | Paradigm Select vs. Needham Small Cap | Paradigm Select vs. Touchstone Mid Cap |
| Scout Mid vs. Chartwell Short Duration | Scout Mid vs. Carillon Chartwell Short | Scout Mid vs. Chartwell Short Duration | Scout Mid 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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