Correlation Between Champlain Mid and Quantitative

Can any of the company-specific risk be diversified away by investing in both Champlain Mid and Quantitative 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 Quantitative 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 Quantitative U S, you can compare the effects of market volatilities on Champlain Mid and Quantitative 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 Quantitative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Mid and Quantitative.

Diversification Opportunities for Champlain Mid and Quantitative

0.95

Correlation Coefficient

Champlain Mid  Quantitative

Almost no diversification

The 3 months correlation between Champlain and Quantitative is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Mid Cap and Quantitative U S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantitative U S 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 Quantitative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantitative U S has no effect on the direction of Champlain Mid i.e., Champlain Mid and Quantitative go up and down completely randomly.

Pair Corralation between Champlain Mid and Quantitative

Assuming the 90 days horizon Champlain Mid Cap is expected to generate 0.98 times more return on investment than Quantitative. However, Champlain Mid Cap is 1.02 times less risky than Quantitative. It trades about -0.14 of its potential returns per unit of risk. Quantitative U S is currently generating about -0.24 per unit of risk. If you would invest  2,614  in Champlain Mid Cap on December 3, 2024 and sell it today you would lose (329.00) from holding Champlain Mid Cap or give up 12.59% of portfolio value over 90 days.

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

Champlain Mid Cap  vs.  Quantitative U S

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 primary indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Quantitative U S

Risk-Adjusted Performance

Very Weak

Over the last 90 days Quantitative U S 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 fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Champlain Mid and Quantitative

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

The idea behind Champlain Mid Cap and Quantitative U S 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.