Correlation Between Extended Market and Us Small
Can any of the company-specific risk be diversified away by investing in both Extended Market and Us 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 Extended Market and Us Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Extended Market Index and Us Small Cap, you can compare the effects of market volatilities on Extended Market and Us 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 Extended Market with a short position of Us Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extended Market and Us Small.
Diversification Opportunities for Extended Market and Us Small
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Extended and RLESX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Extended Market Index and Us Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Small Cap and Extended Market 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 Extended Market Index are associated (or correlated) with Us Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Small Cap has no effect on the direction of Extended Market i.e., Extended Market and Us Small go up and down completely randomly.
Pair Corralation between Extended Market and Us Small
If you would invest 2,080 in Extended Market Index on October 25, 2024 and sell it today you would earn a total of 49.00 from holding Extended Market Index or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.56% |
| Values | Daily Returns |
Extended Market Index vs. Us Small Cap
Performance |
| Timeline |
| Extended Market Index |
| Us Small Cap |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Extended Market and Us Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extended Market and Us Small
The main advantage of trading using opposite Extended Market and Us Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extended Market position performs unexpectedly, Us 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 Us Small will offset losses from the drop in Us Small's long position.| Extended Market vs. Victory High Yield | Extended Market vs. Strategic Advisers Income | Extended Market vs. Voya High Yield | Extended Market vs. Msift High Yield |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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