| USPRX Fund | | | USD 77.08 0.42 0.55% |
The current 90-days correlation between Sp 500 Index and Small Cap Stock is 0.12 (i.e., Average diversification). The correlation of Sp 500 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.
Sp 500 Correlation With Market
Very poor diversification
The correlation between Sp 500 Index and DJI is 0.82 (i.e., Very poor diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Sp 500 Index 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 Sp 500 Index. 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 metropolitan statistical area.