Correlation Between Small Cap and Predex Funds
Can any of the company-specific risk be diversified away by investing in both Small Cap and Predex Funds 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 Small Cap and Predex Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Growth and Predex Funds, you can compare the effects of market volatilities on Small Cap and Predex Funds 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 Small Cap with a short position of Predex Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Predex Funds.
Diversification Opportunities for Small Cap and Predex Funds
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Small and Predex is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Growth and Predex Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Predex Funds and Small Cap 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 Small Cap Growth are associated (or correlated) with Predex Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Predex Funds has no effect on the direction of Small Cap i.e., Small Cap and Predex Funds go up and down completely randomly.
Pair Corralation between Small Cap and Predex Funds
If you would invest 1,913 in Small Cap Growth on November 7, 2024 and sell it today you would earn a total of 87.00 from holding Small Cap Growth or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Small Cap Growth vs. Predex Funds
Performance |
| Timeline |
| Small Cap Growth |
| Predex Funds |
Small Cap and Predex Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Predex Funds
The main advantage of trading using opposite Small Cap and Predex Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap position performs unexpectedly, Predex Funds 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 Predex Funds will offset losses from the drop in Predex Funds' long position.| Small Cap vs. Dreyfus Government Cash | Small Cap vs. Voya Government Money | Small Cap vs. Elfun Government Money | Small Cap vs. Inverse Government Long |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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