Correlation Between Vanguard Small and ACGR
Can any of the company-specific risk be diversified away by investing in both Vanguard Small and ACGR 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 and ACGR 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 ACGR, you can compare the effects of market volatilities on Vanguard Small and ACGR 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 with a short position of ACGR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small and ACGR.
Diversification Opportunities for Vanguard Small and ACGR
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vanguard and ACGR is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Index and ACGR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACGR and Vanguard 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 Vanguard Small Cap Index are associated (or correlated) with ACGR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACGR has no effect on the direction of Vanguard Small i.e., Vanguard Small and ACGR go up and down completely randomly.
Pair Corralation between Vanguard Small and ACGR
Allowing for the 90-day total investment horizon Vanguard Small Cap Index is expected to generate 0.82 times more return on investment than ACGR. However, Vanguard Small Cap Index is 1.22 times less risky than ACGR. It trades about 0.18 of its potential returns per unit of risk. ACGR is currently generating about -0.01 per unit of risk. If you would invest 24,392 in Vanguard Small Cap Index on October 25, 2024 and sell it today you would earn a total of 734.00 from holding Vanguard Small Cap Index or generate 3.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Small Cap Index vs. ACGR
Performance |
| Timeline |
| Vanguard Small Cap |
| ACGR |
Vanguard Small and ACGR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small and ACGR
The main advantage of trading using opposite Vanguard Small and ACGR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small position performs unexpectedly, ACGR 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 ACGR will offset losses from the drop in ACGR's long position.| Vanguard Small vs. Vanguard Mid Cap Index | Vanguard Small vs. Vanguard Small Cap Value | Vanguard Small vs. Vanguard FTSE Emerging | Vanguard Small vs. Vanguard Large Cap Index |
| ACGR vs. FT Vest Equity | ACGR vs. Northern Lights | ACGR vs. Dimensional International High | ACGR vs. First Trust Exchange Traded |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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