Correlation Between Carillon Chartwell and Eagle Growth

Can any of the company-specific risk be diversified away by investing in both Carillon Chartwell and Eagle Growth 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 Carillon Chartwell and Eagle Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Carillon Chartwell Mid and Eagle Growth Income, you can compare the effects of market volatilities on Carillon Chartwell and Eagle Growth 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 Carillon Chartwell with a short position of Eagle Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carillon Chartwell and Eagle Growth.

Diversification Opportunities for Carillon Chartwell and Eagle Growth

0.98

Correlation Coefficient

Carillon Chartwell  Eagle Growth

Almost no diversification

The 3 months correlation between Carillon and Eagle is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Carillon Chartwell Mid and Eagle Growth Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Growth Income and Carillon Chartwell 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 Carillon Chartwell Mid are associated (or correlated) with Eagle Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Growth Income has no effect on the direction of Carillon Chartwell i.e., Carillon Chartwell and Eagle Growth go up and down completely randomly.

Pair Corralation between Carillon Chartwell and Eagle Growth

Assuming the 90 days horizon Carillon Chartwell Mid is expected to generate 1.06 times more return on investment than Eagle Growth. However, Carillon Chartwell is 1.06 times more volatile than Eagle Growth Income. It trades about -0.04 of its potential returns per unit of risk. Eagle Growth Income is currently generating about -0.04 per unit of risk. If you would invest  1,674  in Carillon Chartwell Mid on December 29, 2024 and sell it today you would lose (39.00) from holding Carillon Chartwell Mid or give up 2.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Carillon Chartwell Mid  vs.  Eagle Growth Income

Carillon Chartwell Mid

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carillon Chartwell Mid has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Carillon Chartwell is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eagle Growth Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eagle Growth Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Eagle Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Carillon Chartwell and Eagle Growth

The main advantage of trading using opposite Carillon Chartwell and Eagle Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carillon Chartwell position performs unexpectedly, Eagle Growth 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 Eagle Growth will offset losses from the drop in Eagle Growth's long position.

The idea behind Carillon Chartwell Mid and Eagle Growth Income pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.