Correlation Between Conestoga Small and Ycg Enhanced

Can any of the company-specific risk be diversified away by investing in both Conestoga Small and Ycg Enhanced 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 Conestoga Small and Ycg Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Conestoga Small Cap and Ycg Enhanced Fund, you can compare the effects of market volatilities on Conestoga Small and Ycg Enhanced 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 Conestoga Small with a short position of Ycg Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conestoga Small and Ycg Enhanced.

Diversification Opportunities for Conestoga Small and Ycg Enhanced

0.9

Correlation Coefficient

Conestoga Small  Ycg Enhanced

Almost no diversification

The 3 months correlation between Conestoga and Ycg is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Conestoga Small Cap and Ycg Enhanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ycg Enhanced and Conestoga Small 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 Conestoga Small Cap are associated (or correlated) with Ycg Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ycg Enhanced has no effect on the direction of Conestoga Small i.e., Conestoga Small and Ycg Enhanced go up and down completely randomly.

Pair Corralation between Conestoga Small and Ycg Enhanced

Assuming the 90 days horizon Conestoga Small Cap is expected to generate 1.99 times more return on investment than Ycg Enhanced. However, Conestoga Small is 1.99 times more volatile than Ycg Enhanced Fund. It trades about 0.18 of its potential returns per unit of risk. Ycg Enhanced Fund is currently generating about 0.12 per unit of risk. If you would invest  7,235  in Conestoga Small Cap on September 12, 2024 and sell it today you would earn a total of  1,008  from holding Conestoga Small Cap or generate 13.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Conestoga Small Cap  vs.  Ycg Enhanced Fund

Conestoga Small Cap

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Conestoga Small Cap are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Conestoga Small showed solid returns over the last few months and may actually be approaching a breakup point.

Ycg Enhanced

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ycg Enhanced Fund are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Ycg Enhanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Conestoga Small and Ycg Enhanced

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

The idea behind Conestoga Small Cap and Ycg Enhanced Fund 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.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.