Correlation Between General Money and Conestoga Small

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

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

Diversification Opportunities for General Money and Conestoga Small

0.0

Correlation Coefficient

General Money  Conestoga Small

Pay attention - limited upside

The 3 months correlation between General and Conestoga is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Money Market and Conestoga Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conestoga Small Cap and General Money 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 General Money Market are associated (or correlated) with Conestoga Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conestoga Small Cap has no effect on the direction of General Money i.e., General Money and Conestoga Small go up and down completely randomly.

Pair Corralation between General Money and Conestoga Small

If you would invest  100.00  in General Money Market on December 30, 2024 and sell it today you would earn a total of  0.00  from holding General Money Market or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.38%
Values	Daily Returns

General Money Market  vs.  Conestoga Small Cap

General Money Market

Risk-Adjusted Performance

Very Weak

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

Conestoga Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Conestoga Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with General Money and Conestoga Small

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

The idea behind General Money Market and Conestoga Small 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.