Correlation Between Short Duration and Carillon Scout

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

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

Diversification Opportunities for Short Duration and Carillon Scout

0.79

Correlation Coefficient

Short Duration  Carillon Scout

Poor diversification

The 3 months correlation between Short and Carillon is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Short Duration Inflation and Carillon Scout Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carillon Scout Small and Short Duration 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 Short Duration Inflation are associated (or correlated) with Carillon Scout. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carillon Scout Small has no effect on the direction of Short Duration i.e., Short Duration and Carillon Scout go up and down completely randomly.

Pair Corralation between Short Duration and Carillon Scout

Assuming the 90 days horizon Short Duration is expected to generate 8.36 times less return on investment than Carillon Scout. But when comparing it to its historical volatility, Short Duration Inflation is 7.83 times less risky than Carillon Scout. It trades about 0.18 of its potential returns per unit of risk. Carillon Scout Small is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  2,624  in Carillon Scout Small on May 8, 2025 and sell it today you would earn a total of  343.00  from holding Carillon Scout Small or generate 13.07% return on investment over 90 days.

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

Short Duration Inflation  vs.  Carillon Scout Small

Short Duration Inflation

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Short Duration Inflation are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Short Duration is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Carillon Scout Small

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Carillon Scout Small are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Carillon Scout showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Short Duration and Carillon Scout

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

The idea behind Short Duration Inflation and Carillon Scout Small 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.