Correlation Between Chartwell Small and Chartwell Short

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

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

Diversification Opportunities for Chartwell Small and Chartwell Short

0.85

Correlation Coefficient

Chartwell Small  Chartwell Short

Very poor diversification

The 3 months correlation between CHARTWELL and Chartwell is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Chartwell Small Cap 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 Chartwell Small 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 Chartwell Small Cap 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 Chartwell Small i.e., Chartwell Small and Chartwell Short go up and down completely randomly.

Pair Corralation between Chartwell Small and Chartwell Short

Assuming the 90 days horizon Chartwell Small Cap is expected to generate 15.16 times more return on investment than Chartwell Short. However, Chartwell Small is 15.16 times more volatile than Chartwell Short Duration. It trades about 0.15 of its potential returns per unit of risk. Chartwell Short Duration is currently generating about 0.43 per unit of risk. If you would invest  1,282  in Chartwell Small Cap on April 24, 2025 and sell it today you would earn a total of  159.00  from holding Chartwell Small Cap or generate 12.4% return on investment over 90 days.

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

Chartwell Small Cap  vs.  Chartwell Short Duration

Chartwell Small Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chartwell Small Cap are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Chartwell Small may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Chartwell Short Duration

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Chartwell Short Duration are ranked lower than 33 (%) 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 Chartwell Small and Chartwell Short

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