Correlation Between Ancora Microcap and Vanguard Growth
Can any of the company-specific risk be diversified away by investing in both Ancora Microcap and Vanguard Growth 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 Ancora Microcap and Vanguard Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ancora Microcap Fund and Vanguard Growth Index, you can compare the effects of market volatilities on Ancora Microcap and Vanguard Growth 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 Ancora Microcap with a short position of Vanguard Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ancora Microcap and Vanguard Growth.
Diversification Opportunities for Ancora Microcap and Vanguard Growth
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ancora and Vanguard is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Ancora Microcap Fund and Vanguard Growth Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Growth Index and Ancora Microcap 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 Ancora Microcap Fund are associated (or correlated) with Vanguard Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Growth Index has no effect on the direction of Ancora Microcap i.e., Ancora Microcap and Vanguard Growth go up and down completely randomly.
Pair Corralation between Ancora Microcap and Vanguard Growth
Assuming the 90 days horizon Ancora Microcap is expected to generate 2.16 times less return on investment than Vanguard Growth. But when comparing it to its historical volatility, Ancora Microcap Fund is 1.07 times less risky than Vanguard Growth. It trades about 0.06 of its potential returns per unit of risk. Vanguard Growth Index is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 11,693 in Vanguard Growth Index on September 3, 2024 and sell it today you would earn a total of 9,358 from holding Vanguard Growth Index or generate 80.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ancora Microcap Fund vs. Vanguard Growth Index
Performance |
| Timeline |
| Ancora Microcap |
| Vanguard Growth Index |
Ancora Microcap and Vanguard Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ancora Microcap and Vanguard Growth
The main advantage of trading using opposite Ancora Microcap and Vanguard Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ancora Microcap position performs unexpectedly, Vanguard Growth 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 Vanguard Growth will offset losses from the drop in Vanguard Growth's long position.| Ancora Microcap vs. Virtus Real Estate | Ancora Microcap vs. Simt Real Estate | Ancora Microcap vs. Dunham Real Estate | Ancora Microcap vs. Jhancock Real Estate |
| Vanguard Growth vs. American Funds The | Vanguard Growth vs. American Funds The | Vanguard Growth vs. Growth Fund Of | Vanguard Growth vs. Growth Fund Of |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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