Correlation Between Carillon Chartwell and Carillon Eagle

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

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

Diversification Opportunities for Carillon Chartwell and Carillon Eagle

0.1

Correlation Coefficient

Carillon Chartwell  Carillon Eagle

Average diversification

The 3 months correlation between Carillon and Carillon is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Carillon Chartwell Small and Carillon Eagle Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carillon Eagle Mid and Carillon Chartwell 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 Carillon Chartwell Small are associated (or correlated) with Carillon Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carillon Eagle Mid has no effect on the direction of Carillon Chartwell i.e., Carillon Chartwell and Carillon Eagle go up and down completely randomly.

Pair Corralation between Carillon Chartwell and Carillon Eagle

Assuming the 90 days horizon Carillon Chartwell Small is expected to under-perform the Carillon Eagle. In addition to that, Carillon Chartwell is 3.67 times more volatile than Carillon Eagle Mid. It trades about -0.04 of its total potential returns per unit of risk. Carillon Eagle Mid is currently generating about -0.01 per unit of volatility. If you would invest  8,048  in Carillon Eagle Mid on October 4, 2024 and sell it today you would lose (10.00) from holding Carillon Eagle Mid or give up 0.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	5.78%
Values	Daily Returns

Carillon Chartwell Small  vs.  Carillon Eagle Mid

Carillon Chartwell Small

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carillon Chartwell Small 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 February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Carillon Eagle Mid

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Carillon Chartwell and Carillon Eagle

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

The idea behind Carillon Chartwell Small and Carillon Eagle Mid 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.