Correlation Between Walden Smid and Champlain Mid
Can any of the company-specific risk be diversified away by investing in both Walden Smid and Champlain 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 Walden Smid and Champlain Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walden Smid Cap and Champlain Mid Cap, you can compare the effects of market volatilities on Walden Smid and Champlain 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 Walden Smid with a short position of Champlain Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walden Smid and Champlain Mid.
Diversification Opportunities for Walden Smid and Champlain Mid
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Walden and Champlain is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Walden Smid Cap and Champlain Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champlain Mid Cap and Walden Smid 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 Walden Smid Cap are associated (or correlated) with Champlain Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champlain Mid Cap has no effect on the direction of Walden Smid i.e., Walden Smid and Champlain Mid go up and down completely randomly.
Pair Corralation between Walden Smid and Champlain Mid
Assuming the 90 days horizon Walden Smid is expected to generate 1.05 times less return on investment than Champlain Mid. In addition to that, Walden Smid is 1.14 times more volatile than Champlain Mid Cap. It trades about 0.32 of its total potential returns per unit of risk. Champlain Mid Cap is currently generating about 0.38 per unit of volatility. If you would invest 2,424 in Champlain Mid Cap on August 28, 2024 and sell it today you would earn a total of 196.00 from holding Champlain Mid Cap or generate 8.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Walden Smid Cap vs. Champlain Mid Cap
Performance |
| Timeline |
| Walden Smid Cap |
| Champlain Mid Cap |
Walden Smid and Champlain Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walden Smid and Champlain Mid
The main advantage of trading using opposite Walden Smid and Champlain Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walden Smid position performs unexpectedly, Champlain 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 Champlain Mid will offset losses from the drop in Champlain Mid's long position.| Walden Smid vs. Walden Midcap Fund | Walden Smid vs. Calvert Small Cap | Walden Smid vs. Calvert International Equity | Walden Smid vs. Champlain Mid Cap |
| Champlain Mid vs. Champlain Small Pany | Champlain Mid vs. T Rowe Price | Champlain Mid vs. American Mutual Fund | Champlain Mid vs. Loomis Sayles Growth |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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