Correlation Between General Money and Small Cap
Can any of the company-specific risk be diversified away by investing in both General Money and Small Cap 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 General Money and Small Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Money Market and Small Cap Stock, you can compare the effects of market volatilities on General Money and Small Cap 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 General Money with a short position of Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Money and Small Cap.
Diversification Opportunities for General Money and Small Cap
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between General and Small is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Money Market and Small Cap Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Stock and General Money 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 General Money Market are associated (or correlated) with Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Stock has no effect on the direction of General Money i.e., General Money and Small Cap go up and down completely randomly.
Pair Corralation between General Money and Small Cap
If you would invest 100.00 in General Money Market on October 12, 2024 and sell it today you would earn a total of 0.00 from holding General Money Market or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Money Market vs. Small Cap Stock
Performance |
| Timeline |
| General Money Market |
| Small Cap Stock |
General Money and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Money and Small Cap
The main advantage of trading using opposite General Money and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Money position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap's long position.| General Money vs. Tiaa Cref Lifestyle Moderate | General Money vs. Moderately Aggressive Balanced | General Money vs. Qs Moderate Growth | General Money vs. Voya Target Retirement |
| Small Cap vs. Ab Government Exchange | Small Cap vs. Fidelity Government Money | Small Cap vs. General Money Market | Small Cap vs. Prudential Government Money |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |