Correlation Between Scout Core and Carillon Reams
Can any of the company-specific risk be diversified away by investing in both Scout Core and Carillon Reams 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 Scout Core and Carillon Reams into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scout E Bond and Carillon Reams Core, you can compare the effects of market volatilities on Scout Core and Carillon Reams 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 Scout Core with a short position of Carillon Reams. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scout Core and Carillon Reams.
Diversification Opportunities for Scout Core and Carillon Reams
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Scout and Carillon is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Scout E Bond and Carillon Reams Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carillon Reams Core and Scout Core 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 Scout E Bond are associated (or correlated) with Carillon Reams. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carillon Reams Core has no effect on the direction of Scout Core i.e., Scout Core and Carillon Reams go up and down completely randomly.
Pair Corralation between Scout Core and Carillon Reams
Assuming the 90 days horizon Scout E Bond is expected to generate 0.99 times more return on investment than Carillon Reams. However, Scout E Bond is 1.01 times less risky than Carillon Reams. It trades about -0.02 of its potential returns per unit of risk. Carillon Reams Core is currently generating about -0.04 per unit of risk. If you would invest 1,071 in Scout E Bond on August 27, 2024 and sell it today you would lose (2.00) from holding Scout E Bond or give up 0.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scout E Bond vs. Carillon Reams Core
Performance |
| Timeline |
| Scout E Bond |
| Carillon Reams Core |
Scout Core and Carillon Reams Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scout Core and Carillon Reams
The main advantage of trading using opposite Scout Core and Carillon Reams positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scout Core position performs unexpectedly, Carillon Reams 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 Carillon Reams will offset losses from the drop in Carillon Reams' long position.| Scout Core vs. Deutsche Global Inflation | Scout Core vs. Arrow Managed Futures | Scout Core vs. Western Asset Inflation | Scout Core vs. Loomis Sayles Inflation |
| Carillon Reams vs. Chartwell Short Duration | Carillon Reams vs. Carillon Chartwell Short | Carillon Reams vs. Chartwell Short Duration | Carillon Reams 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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