Correlation Between Stet California and Chartwell Short
Can any of the company-specific risk be diversified away by investing in both Stet California 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 Stet California and Chartwell Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stet California Municipal and Chartwell Short Duration, you can compare the effects of market volatilities on Stet California 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 Stet California with a short position of Chartwell Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stet California and Chartwell Short.
Diversification Opportunities for Stet California and Chartwell Short
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stet and Chartwell is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Stet California Municipal 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 Stet California 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 Stet California Municipal 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 Stet California i.e., Stet California and Chartwell Short go up and down completely randomly.
Pair Corralation between Stet California and Chartwell Short
Assuming the 90 days horizon Stet California Municipal is expected to generate 1.32 times more return on investment than Chartwell Short. However, Stet California is 1.32 times more volatile than Chartwell Short Duration. It trades about 0.37 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 996.00 in Stet California Municipal on June 1, 2025 and sell it today you would earn a total of 24.00 from holding Stet California Municipal or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stet California Municipal vs. Chartwell Short Duration
Performance |
| Timeline |
| Stet California Municipal |
| Chartwell Short Duration |
Stet California and Chartwell Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stet California and Chartwell Short
The main advantage of trading using opposite Stet California and Chartwell Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stet California 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.| Stet California vs. Dws Government Money | Stet California vs. Tiaa Cref Life Money | Stet California vs. Profunds Money | Stet California vs. Putnam Money Market |
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Check out your portfolio center.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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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