Smallcap World Correlations

Mutual Funds . USA . 
Fund . Smallcap World Fund
SCWFX Fund  USD 70.55  1.08  1.55%   
The current 90-days correlation between Smallcap World and New World Fund is 0.73 (i.e., Poor diversification). The correlation of Smallcap World is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak. If the correlation is 0, the equities are not correlated; they are entirely random.

Smallcap World Correlation With Market

Very poor diversification

The correlation between Smallcap World Fund and DJI is 0.81 (i.e., Very poor diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap World Fund and DJI in the same portfolio, assuming nothing else is changed.
  
Check out World Market Map to better understand how to build diversified portfolios, which includes a position in Smallcap World Fund. Also, note that the market value of any mutual fund could be closely tied with the direction of predictive economic indicators such as signals in census.

Moving together with Smallcap Mutual Fund

  0.85AMECX Income FundPairCorr
  0.67RNEBX New World FundPairCorr
  0.83AMFCX American MutualPairCorr
  0.82AMFFX American MutualPairCorr
  0.87RNCCX American Funds IncomePairCorr
  0.84AMEFX Income FundPairCorr
  0.8RNGGX New Economy FundPairCorr
  0.8RNGFX New Economy FundPairCorr
  0.8RNGHX New Economy FundPairCorr
  0.81RNGBX New Economy FundPairCorr
  0.81RNGAX New Economy FundPairCorr
  0.8RNGEX New Economy FundPairCorr
  0.8RNGCX New Economy FundPairCorr
  0.88FPTPX American Funds ConsePairCorr
  0.8RNNEX New Economy FundPairCorr
  0.9CDJAX American Funds CollegePairCorr
  0.82AMPCX Amcap Fund ClassPairCorr
  0.81AMPFX Amcap Fund ClassPairCorr
  0.92RNPBX New PerspectivePairCorr
  0.92RNPAX New PerspectivePairCorr
  0.91RNPHX New PerspectivePairCorr
  0.91RNPGX New PerspectivePairCorr
  0.91RNPCX New PerspectivePairCorr
  0.91RNPFX New PerspectivePairCorr
  0.91RNPEX New PerspectivePairCorr
  0.82AMRMX American MutualPairCorr
  0.82AMRFX American MutualPairCorr
  0.85RNRPX American Funds RetirementPairCorr
  0.68RNWFX New World FundPairCorr

Related Correlations Analysis

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Risk-Adjusted Indicators

There is a big difference between Smallcap Mutual Fund performing well and Smallcap World Mutual Fund doing well as a business compared to the competition. There are so many exceptions to the norm that investors cannot definitively determine what's good or bad unless they analyze Smallcap World's multiple risk-adjusted performance indicators across the competitive landscape. These indicators are quantitative in nature and help investors forecast volatility and risk-adjusted expected returns across various positions.

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