Correlation Between Carillon Scout and Chartwell Short

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

By analyzing existing cross correlation between Carillon Scout Mid and Chartwell Short Duration, you can compare the effects of market volatilities on Carillon Scout and Chartwell Short 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 Scout with a short position of Chartwell Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carillon Scout and Chartwell Short.

Diversification Opportunities for Carillon Scout and Chartwell Short

0.86

Correlation Coefficient

Carillon Scout  Chartwell Short

Very poor diversification

The 3 months correlation between Carillon and Chartwell is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Carillon Scout Mid and Chartwell Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chartwell Short Duration and Carillon Scout 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 Scout Mid are associated (or correlated) with Chartwell Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chartwell Short Duration has no effect on the direction of Carillon Scout i.e., Carillon Scout and Chartwell Short go up and down completely randomly.

Pair Corralation between Carillon Scout and Chartwell Short

Assuming the 90 days horizon Carillon Scout Mid is expected to generate 7.81 times more return on investment than Chartwell Short. However, Carillon Scout is 7.81 times more volatile than Chartwell Short Duration. It trades about 0.2 of its potential returns per unit of risk. Chartwell Short Duration is currently generating about 0.09 per unit of risk. If you would invest  2,546  in Carillon Scout Mid on September 14, 2024 and sell it today you would earn a total of  257.00  from holding Carillon Scout Mid or generate 10.09% return on investment over 90 days.

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

Carillon Scout Mid  vs.  Chartwell Short Duration

Carillon Scout Mid

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Carillon Scout Mid are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Carillon Scout may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Chartwell Short Duration

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chartwell Short Duration are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Chartwell Short 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 Scout and Chartwell Short

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

The idea behind Carillon Scout Mid and Chartwell Short Duration 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.