Correlation Between James Small and Vanguard Small
Can any of the company-specific risk be diversified away by investing in both James Small and Vanguard Small 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 James Small and Vanguard Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between James Small Cap and Vanguard Small Cap Value, you can compare the effects of market volatilities on James Small and Vanguard Small 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 James Small with a short position of Vanguard Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Small and Vanguard Small.
Diversification Opportunities for James Small and Vanguard Small
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between James and Vanguard is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding James Small Cap and Vanguard Small Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Small Cap and James Small 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 James Small Cap are associated (or correlated) with Vanguard Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Small Cap has no effect on the direction of James Small i.e., James Small and Vanguard Small go up and down completely randomly.
Pair Corralation between James Small and Vanguard Small
Assuming the 90 days horizon James Small Cap is expected to generate 1.0 times more return on investment than Vanguard Small. However, James Small Cap is 1.0 times less risky than Vanguard Small. It trades about 0.12 of its potential returns per unit of risk. Vanguard Small Cap Value is currently generating about 0.1 per unit of risk. If you would invest 3,284 in James Small Cap on September 4, 2024 and sell it today you would earn a total of 1,136 from holding James Small Cap or generate 34.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
James Small Cap vs. Vanguard Small Cap Value
Performance |
| Timeline |
| James Small Cap |
| Vanguard Small Cap |
James Small and Vanguard Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Small and Vanguard Small
The main advantage of trading using opposite James Small and Vanguard Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Small position performs unexpectedly, Vanguard Small 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 Small will offset losses from the drop in Vanguard Small's long position.| James Small vs. James Balanced Golden | James Small vs. Sterling Capital Stratton | James Small vs. Perritt Microcap Opportunities | James Small vs. Royce Smaller Companies Growth |
| Vanguard Small vs. Ab Global Real | Vanguard Small vs. Legg Mason Global | Vanguard Small vs. Ab Global Real | Vanguard Small vs. Barings Global Floating |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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