Correlation Between Carillon Scout and Carillon Scout

Can any of the company-specific risk be diversified away by investing in both Carillon Scout 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 Carillon Scout and Carillon Scout 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 Carillon Scout Small, you can compare the effects of market volatilities on Carillon Scout 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 Carillon Scout with a short position of Carillon Scout. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carillon Scout and Carillon Scout.

Diversification Opportunities for Carillon Scout and Carillon Scout

0.96

Correlation Coefficient

Carillon Scout  Carillon Scout

Almost no diversification

The 3 months correlation between Carillon and Carillon is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Carillon Scout Mid 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 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 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 Carillon Scout i.e., Carillon Scout and Carillon Scout go up and down completely randomly.

Pair Corralation between Carillon Scout and Carillon Scout

Assuming the 90 days horizon Carillon Scout Mid is expected to generate 0.69 times more return on investment than Carillon Scout. However, Carillon Scout Mid is 1.45 times less risky than Carillon Scout. It trades about 0.32 of its potential returns per unit of risk. Carillon Scout Small is currently generating about 0.22 per unit of risk. If you would invest  2,162  in Carillon Scout Mid on April 23, 2025 and sell it today you would earn a total of  352.00  from holding Carillon Scout Mid or generate 16.28% return on investment over 90 days.

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

Carillon Scout Mid  vs.  Carillon Scout Small

Carillon Scout Mid

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Carillon Scout Mid are ranked lower than 25 (%) 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.

Carillon Scout Small

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Carillon Scout Small are ranked lower than 17 (%) 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 Carillon Scout and Carillon Scout

The main advantage of trading using opposite Carillon Scout and Carillon Scout positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carillon Scout 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 Carillon Scout Mid 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.