Correlation Between Champlain Small and Pnc International

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

By analyzing existing cross correlation between Champlain Small and Pnc International Equity, you can compare the effects of market volatilities on Champlain Small and Pnc International 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 Small with a short position of Pnc International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Pnc International.

Diversification Opportunities for Champlain Small and Pnc International

0.04

Correlation Coefficient

Champlain Small  Pnc International

Significant diversification

The 3 months correlation between Champlain and Pnc is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Pnc International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pnc International Equity and Champlain 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 Champlain Small are associated (or correlated) with Pnc International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pnc International Equity has no effect on the direction of Champlain Small i.e., Champlain Small and Pnc International go up and down completely randomly.

Pair Corralation between Champlain Small and Pnc International

Assuming the 90 days horizon Champlain Small is expected to under-perform the Pnc International. In addition to that, Champlain Small is 1.17 times more volatile than Pnc International Equity. It trades about -0.1 of its total potential returns per unit of risk. Pnc International Equity is currently generating about 0.15 per unit of volatility. If you would invest  2,151  in Pnc International Equity on December 21, 2024 and sell it today you would earn a total of  179.00  from holding Pnc International Equity or generate 8.32% return on investment over 90 days.

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

Champlain Small  vs.  Pnc International Equity

Champlain Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Champlain Small 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.

Pnc International Equity

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pnc International Equity are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Pnc International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Champlain Small and Pnc International

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

The idea behind Champlain Small and Pnc International Equity 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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.