Correlation Between Carillon Chartwell and Vanguard Small

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

Diversification Opportunities for Carillon Chartwell and Vanguard Small

0.68

Correlation Coefficient

Carillon Chartwell  Vanguard Small

Poor diversification

The 3 months correlation between Carillon and Vanguard is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Carillon Chartwell Small and Vanguard Small Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Small Cap 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 Vanguard Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Small Cap has no effect on the direction of Carillon Chartwell i.e., Carillon Chartwell and Vanguard Small go up and down completely randomly.

Pair Corralation between Carillon Chartwell and Vanguard Small

Assuming the 90 days horizon Carillon Chartwell Small is expected to under-perform the Vanguard Small. In addition to that, Carillon Chartwell is 2.34 times more volatile than Vanguard Small Cap Value. It trades about -0.04 of its total potential returns per unit of risk. Vanguard Small Cap Value is currently generating about 0.07 per unit of volatility. If you would invest  3,542  in Vanguard Small Cap Value on October 5, 2024 and sell it today you would earn a total of  1,219  from holding Vanguard Small Cap Value or generate 34.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	38.11%
Values	Daily Returns

Carillon Chartwell Small  vs.  Vanguard Small Cap Value

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 technical 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.

Vanguard Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanguard Small Cap Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Vanguard Small 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 Vanguard Small

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

The idea behind Carillon Chartwell Small and Vanguard Small Cap Value 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..