Correlation Between Carillon Scout and Rmb Mendon

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

By analyzing existing cross correlation between Carillon Scout Small and Rmb Mendon Financial, you can compare the effects of market volatilities on Carillon Scout and Rmb Mendon 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 Rmb Mendon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carillon Scout and Rmb Mendon.

Diversification Opportunities for Carillon Scout and Rmb Mendon

0.64

Correlation Coefficient

Carillon Scout  Rmb Mendon

Poor diversification

The 3 months correlation between Carillon and Rmb is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Carillon Scout Small and Rmb Mendon Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rmb Mendon Financial 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 Small are associated (or correlated) with Rmb Mendon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rmb Mendon Financial has no effect on the direction of Carillon Scout i.e., Carillon Scout and Rmb Mendon go up and down completely randomly.

Pair Corralation between Carillon Scout and Rmb Mendon

Assuming the 90 days horizon Carillon Scout Small is expected to generate 0.74 times more return on investment than Rmb Mendon. However, Carillon Scout Small is 1.35 times less risky than Rmb Mendon. It trades about 0.19 of its potential returns per unit of risk. Rmb Mendon Financial is currently generating about 0.08 per unit of risk. If you would invest  2,665  in Carillon Scout Small on May 21, 2025 and sell it today you would earn a total of  330.00  from holding Carillon Scout Small or generate 12.38% return on investment over 90 days.

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

Carillon Scout Small  vs.  Rmb Mendon Financial

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 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 September 2025.

Rmb Mendon Financial

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Rmb Mendon Financial are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Rmb Mendon may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Carillon Scout and Rmb Mendon

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

The idea behind Carillon Scout Small and Rmb Mendon Financial 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.