Correlation Between Vanguard Small-cap and Calvert Small
Can any of the company-specific risk be diversified away by investing in both Vanguard Small-cap and Calvert 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 Vanguard Small-cap and Calvert Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Small Cap Index and Calvert Small Cap, you can compare the effects of market volatilities on Vanguard Small-cap and Calvert 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 Vanguard Small-cap with a short position of Calvert Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small-cap and Calvert Small.
Diversification Opportunities for Vanguard Small-cap and Calvert Small
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Calvert is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Index and Calvert Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Small Cap and Vanguard 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 Vanguard Small Cap Index are associated (or correlated) with Calvert Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Small Cap has no effect on the direction of Vanguard Small-cap i.e., Vanguard Small-cap and Calvert Small go up and down completely randomly.
Pair Corralation between Vanguard Small-cap and Calvert Small
Assuming the 90 days horizon Vanguard Small Cap Index is expected to generate 0.86 times more return on investment than Calvert Small. However, Vanguard Small Cap Index is 1.16 times less risky than Calvert Small. It trades about 0.33 of its potential returns per unit of risk. Calvert Small Cap is currently generating about 0.27 per unit of risk. If you would invest 11,453 in Vanguard Small Cap Index on August 28, 2024 and sell it today you would earn a total of 1,063 from holding Vanguard Small Cap Index or generate 9.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Small Cap Index vs. Calvert Small Cap
Performance |
| Timeline |
| Vanguard Small Cap |
| Calvert Small Cap |
Vanguard Small-cap and Calvert Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small-cap and Calvert Small
The main advantage of trading using opposite Vanguard Small-cap and Calvert Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small-cap position performs unexpectedly, Calvert 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 Calvert Small will offset losses from the drop in Calvert Small's long position.| Vanguard Small-cap vs. Vanguard Mid Cap Index | Vanguard Small-cap vs. Vanguard Reit Index | Vanguard Small-cap vs. Vanguard Value Index | Vanguard Small-cap vs. Vanguard Small Cap Value |
| Calvert Small vs. Calvert Large Cap | Calvert Small vs. Calvert Equity Portfolio | Calvert Small vs. Calvert Large Cap |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |