Correlation Between Walden Smid and Pender Real
Can any of the company-specific risk be diversified away by investing in both Walden Smid and Pender Real 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 Pender Real 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 Pender Real Estate, you can compare the effects of market volatilities on Walden Smid and Pender Real 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 Pender Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walden Smid and Pender Real.
Diversification Opportunities for Walden Smid and Pender Real
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walden and Pender is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Walden Smid Cap and Pender Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pender Real Estate 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 Pender Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pender Real Estate has no effect on the direction of Walden Smid i.e., Walden Smid and Pender Real go up and down completely randomly.
Pair Corralation between Walden Smid and Pender Real
Assuming the 90 days horizon Walden Smid Cap is expected to generate 4.07 times more return on investment than Pender Real. However, Walden Smid is 4.07 times more volatile than Pender Real Estate. It trades about 0.16 of its potential returns per unit of risk. Pender Real Estate is currently generating about 0.15 per unit of risk. If you would invest 2,469 in Walden Smid Cap on November 7, 2024 and sell it today you would earn a total of 62.00 from holding Walden Smid Cap or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walden Smid Cap vs. Pender Real Estate
Performance |
| Timeline |
| Walden Smid Cap |
| Pender Real Estate |
Walden Smid and Pender Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walden Smid and Pender Real
The main advantage of trading using opposite Walden Smid and Pender Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walden Smid position performs unexpectedly, Pender Real 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 Pender Real will offset losses from the drop in Pender Real'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 |
| Pender Real vs. Qs Growth Fund | Pender Real vs. Glg Intl Small | Pender Real vs. Barings Active Short | Pender Real vs. Cardinal Small Cap |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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