Correlation Between Chase Growth and Smallcap World
Can any of the company-specific risk be diversified away by investing in both Chase Growth and Smallcap World 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 Chase Growth and Smallcap World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chase Growth Fund and Smallcap World Fund, you can compare the effects of market volatilities on Chase Growth and Smallcap World 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 Chase Growth with a short position of Smallcap World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chase Growth and Smallcap World.
Diversification Opportunities for Chase Growth and Smallcap World
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chase and Smallcap is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Chase Growth Fund and Smallcap World Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smallcap World and Chase Growth 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 Chase Growth Fund are associated (or correlated) with Smallcap World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smallcap World has no effect on the direction of Chase Growth i.e., Chase Growth and Smallcap World go up and down completely randomly.
Pair Corralation between Chase Growth and Smallcap World
Assuming the 90 days horizon Chase Growth Fund is expected to under-perform the Smallcap World. In addition to that, Chase Growth is 4.81 times more volatile than Smallcap World Fund. It trades about -0.25 of its total potential returns per unit of risk. Smallcap World Fund is currently generating about -0.39 per unit of volatility. If you would invest 7,462 in Smallcap World Fund on October 7, 2024 and sell it today you would lose (467.00) from holding Smallcap World Fund or give up 6.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chase Growth Fund vs. Smallcap World Fund
Performance |
| Timeline |
| Chase Growth |
| Smallcap World |
Chase Growth and Smallcap World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chase Growth and Smallcap World
The main advantage of trading using opposite Chase Growth and Smallcap World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chase Growth position performs unexpectedly, Smallcap World 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 Smallcap World will offset losses from the drop in Smallcap World's long position.| Chase Growth vs. The Chesapeake Growth | Chase Growth vs. Aston Montag Caldwell | Chase Growth vs. The Jensen Portfolio | Chase Growth vs. Cambiar Opportunity Fund |
| Smallcap World vs. International Investors Gold | Smallcap World vs. Precious Metals And | Smallcap World vs. Global Gold Fund | Smallcap World vs. Short Precious Metals |
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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