Correlation Between Champlain Mid and Simt Large

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

Diversification Opportunities for Champlain Mid and Simt Large

0.64

Correlation Coefficient

Champlain Mid  Simt Large

Poor diversification

The 3 months correlation between Champlain and Simt is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Mid Cap and Simt Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Large Cap 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 Simt Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Large Cap has no effect on the direction of Champlain Mid i.e., Champlain Mid and Simt Large go up and down completely randomly.

Pair Corralation between Champlain Mid and Simt Large

Assuming the 90 days horizon Champlain Mid is expected to generate 12.81 times less return on investment than Simt Large. In addition to that, Champlain Mid is 1.29 times more volatile than Simt Large Cap. It trades about 0.01 of its total potential returns per unit of risk. Simt Large Cap is currently generating about 0.2 per unit of volatility. If you would invest  2,538  in Simt Large Cap on December 2, 2024 and sell it today you would earn a total of  126.00  from holding Simt Large Cap or generate 4.96% return on investment over 90 days.

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

Champlain Mid Cap  vs.  Simt Large Cap

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.

Simt Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Simt Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Champlain Mid and Simt Large

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

The idea behind Champlain Mid Cap and Simt Large Cap 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.