Correlation Between Chartwell Short and Aristotle Growth

Can any of the company-specific risk be diversified away by investing in both Chartwell Short and Aristotle Growth 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 Chartwell Short and Aristotle Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chartwell Short Duration and Aristotle Growth Equity, you can compare the effects of market volatilities on Chartwell Short and Aristotle Growth 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 Chartwell Short with a short position of Aristotle Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chartwell Short and Aristotle Growth.

Diversification Opportunities for Chartwell Short and Aristotle Growth

-0.13

Correlation Coefficient

Chartwell Short  Aristotle Growth

Good diversification

The 3 months correlation between Chartwell and Aristotle is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Chartwell Short Duration and Aristotle Growth Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristotle Growth Equity and Chartwell Short 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 Chartwell Short Duration are associated (or correlated) with Aristotle Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristotle Growth Equity has no effect on the direction of Chartwell Short i.e., Chartwell Short and Aristotle Growth go up and down completely randomly.

Pair Corralation between Chartwell Short and Aristotle Growth

Assuming the 90 days horizon Chartwell Short is expected to generate 1.42 times less return on investment than Aristotle Growth. But when comparing it to its historical volatility, Chartwell Short Duration is 14.07 times less risky than Aristotle Growth. It trades about 0.21 of its potential returns per unit of risk. Aristotle Growth Equity is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,483  in Aristotle Growth Equity on October 22, 2024 and sell it today you would earn a total of  38.00  from holding Aristotle Growth Equity or generate 2.56% return on investment over 90 days.

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

Chartwell Short Duration  vs.  Aristotle Growth Equity

Chartwell Short Duration

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chartwell Short Duration are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Chartwell Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aristotle Growth Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aristotle Growth Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Aristotle Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Chartwell Short and Aristotle Growth

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

The idea behind Chartwell Short Duration and Aristotle Growth 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.

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 Transaction History module to view history of all your transactions and understand their impact on performance.