Correlation Between Chartwell Small and Eagle Mid

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

Diversification Opportunities for Chartwell Small and Eagle Mid

0.96

Correlation Coefficient

Chartwell Small  Eagle Mid

Almost no diversification

The 3 months correlation between Chartwell and Eagle is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Chartwell Small Cap and Eagle Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Mid Cap 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 Eagle Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Mid Cap has no effect on the direction of Chartwell Small i.e., Chartwell Small and Eagle Mid go up and down completely randomly.

Pair Corralation between Chartwell Small and Eagle Mid

Assuming the 90 days horizon Chartwell Small Cap is expected to under-perform the Eagle Mid. But the mutual fund apears to be less risky and, when comparing its historical volatility, Chartwell Small Cap is 1.18 times less risky than Eagle Mid. The mutual fund trades about -0.28 of its potential returns per unit of risk. The Eagle Mid Cap is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest  6,085  in Eagle Mid Cap on September 28, 2024 and sell it today you would lose (245.00) from holding Eagle Mid Cap or give up 4.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.24%
Values	Daily Returns

Chartwell Small Cap  vs.  Eagle Mid Cap

Chartwell Small Cap

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Chartwell Small Cap are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Chartwell Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eagle Mid Cap

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Mid Cap are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Eagle Mid may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Chartwell Small and Eagle Mid

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

The idea behind Chartwell Small Cap and Eagle Mid Cap 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.