Correlation Between Chartwell Small and Columbia Flexible

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

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

Diversification Opportunities for Chartwell Small and Columbia Flexible

0.67

Correlation Coefficient

Chartwell Small  Columbia Flexible

Poor diversification

The 3 months correlation between Chartwell and Columbia is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Chartwell Small Cap and Columbia Flexible Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Flexible Capital and Chartwell 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 Chartwell Small Cap are associated (or correlated) with Columbia Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Flexible Capital has no effect on the direction of Chartwell Small i.e., Chartwell Small and Columbia Flexible go up and down completely randomly.

Pair Corralation between Chartwell Small and Columbia Flexible

Assuming the 90 days horizon Chartwell Small Cap is expected to under-perform the Columbia Flexible. In addition to that, Chartwell Small is 11.36 times more volatile than Columbia Flexible Capital. It trades about -0.26 of its total potential returns per unit of risk. Columbia Flexible Capital is currently generating about -0.35 per unit of volatility. If you would invest  1,438  in Columbia Flexible Capital on October 4, 2024 and sell it today you would lose (60.00) from holding Columbia Flexible Capital or give up 4.17% of portfolio value over 90 days.

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

Chartwell Small Cap  vs.  Columbia Flexible Capital

Chartwell Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chartwell Small 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 forward 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.

Columbia Flexible Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Columbia Flexible Capital has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Columbia Flexible 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 Small and Columbia Flexible

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

The idea behind Chartwell Small Cap and Columbia Flexible Capital 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.