Correlation Between Chartwell Small and Long-term

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

Diversification Opportunities for Chartwell Small and Long-term

-0.67

Correlation Coefficient

Chartwell Small  Long-term

Excellent diversification

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

Pair Corralation between Chartwell Small and Long-term

Assuming the 90 days horizon Chartwell Small Cap is expected to generate 1.65 times more return on investment than Long-term. However, Chartwell Small is 1.65 times more volatile than Long Term Government Fund. It trades about 0.17 of its potential returns per unit of risk. Long Term Government Fund is currently generating about -0.07 per unit of risk. If you would invest  2,030  in Chartwell Small Cap on September 4, 2024 and sell it today you would earn a total of  276.00  from holding Chartwell Small Cap or generate 13.6% return on investment over 90 days.

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

Chartwell Small Cap  vs.  Long Term Government Fund

Chartwell Small Cap

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chartwell Small Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Chartwell Small showed solid returns over the last few months and may actually be approaching a breakup point.

Long Term Government

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Long Term Government Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Long-term 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 Long-term

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

The idea behind Chartwell Small Cap and Long Term Government Fund 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.