Correlation Between Paradigm Value and Champlain Small
Can any of the company-specific risk be diversified away by investing in both Paradigm Value and Champlain 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 Paradigm Value and Champlain Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paradigm Value Fund and Champlain Small Pany, you can compare the effects of market volatilities on Paradigm Value and Champlain 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 Paradigm Value with a short position of Champlain Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paradigm Value and Champlain Small.
Diversification Opportunities for Paradigm Value and Champlain Small
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Paradigm and Champlain is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Paradigm Value Fund and Champlain Small Pany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champlain Small Pany and Paradigm Value 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 Value Fund are associated (or correlated) with Champlain Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champlain Small Pany has no effect on the direction of Paradigm Value i.e., Paradigm Value and Champlain Small go up and down completely randomly.
Pair Corralation between Paradigm Value and Champlain Small
Assuming the 90 days horizon Paradigm Value is expected to generate 1.43 times less return on investment than Champlain Small. In addition to that, Paradigm Value is 1.19 times more volatile than Champlain Small Pany. It trades about 0.07 of its total potential returns per unit of risk. Champlain Small Pany is currently generating about 0.13 per unit of volatility. If you would invest 2,078 in Champlain Small Pany on September 2, 2024 and sell it today you would earn a total of 408.00 from holding Champlain Small Pany or generate 19.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paradigm Value Fund vs. Champlain Small Pany
Performance |
| Timeline |
| Paradigm Value |
| Champlain Small Pany |
Paradigm Value and Champlain Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paradigm Value and Champlain Small
The main advantage of trading using opposite Paradigm Value and Champlain Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paradigm Value position performs unexpectedly, Champlain 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 Champlain Small will offset losses from the drop in Champlain Small's long position.| Paradigm Value vs. Royce Small Cap Value | Paradigm Value vs. Royce Smaller Companies Growth | Paradigm Value vs. Kinetics Paradigm Fund | Paradigm Value vs. Tcw Relative Value |
| Champlain Small vs. Champlain Mid Cap | Champlain Small vs. Aberdeen Select International | Champlain Small vs. Marsico 21st Century | Champlain Small vs. Diamond Hill Large |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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