Correlation Between Champlain Mid and Bny Mellon

Can any of the company-specific risk be diversified away by investing in both Champlain Mid and Bny Mellon 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 Champlain Mid and Bny Mellon into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Champlain Mid Cap and Bny Mellon Emerging, you can compare the effects of market volatilities on Champlain Mid and Bny Mellon 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 Champlain Mid with a short position of Bny Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Mid and Bny Mellon.

Diversification Opportunities for Champlain Mid and Bny Mellon

0.58

Correlation Coefficient

Champlain Mid  Bny Mellon

Very weak diversification

The 3 months correlation between Champlain and Bny is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Mid Cap and Bny Mellon Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bny Mellon Emerging and Champlain Mid 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 Champlain Mid Cap are associated (or correlated) with Bny Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bny Mellon Emerging has no effect on the direction of Champlain Mid i.e., Champlain Mid and Bny Mellon go up and down completely randomly.

Pair Corralation between Champlain Mid and Bny Mellon

Assuming the 90 days horizon Champlain Mid Cap is expected to under-perform the Bny Mellon. In addition to that, Champlain Mid is 2.0 times more volatile than Bny Mellon Emerging. It trades about -0.14 of its total potential returns per unit of risk. Bny Mellon Emerging is currently generating about -0.01 per unit of volatility. If you would invest  1,017  in Bny Mellon Emerging on November 28, 2024 and sell it today you would lose (6.00) from holding Bny Mellon Emerging or give up 0.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.31%
Values	Daily Returns

Champlain Mid Cap  vs.  Bny Mellon Emerging

Champlain Mid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Champlain Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Bny Mellon Emerging

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bny Mellon Emerging has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, Bny Mellon is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Champlain Mid and Bny Mellon

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

The idea behind Champlain Mid Cap and Bny Mellon Emerging 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.