Correlation Between Growth Income and Wasatch Small
Can any of the company-specific risk be diversified away by investing in both Growth Income and Wasatch 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 Growth Income and Wasatch Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Income Fund and Wasatch Small Cap, you can compare the effects of market volatilities on Growth Income and Wasatch 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 Growth Income with a short position of Wasatch Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Income and Wasatch Small.
Diversification Opportunities for Growth Income and Wasatch Small
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GROWTH and Wasatch is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Growth Income Fund and Wasatch Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch Small Cap and Growth Income 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 Growth Income Fund are associated (or correlated) with Wasatch Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch Small Cap has no effect on the direction of Growth Income i.e., Growth Income and Wasatch Small go up and down completely randomly.
Pair Corralation between Growth Income and Wasatch Small
Assuming the 90 days horizon Growth Income is expected to generate 1.16 times less return on investment than Wasatch Small. But when comparing it to its historical volatility, Growth Income Fund is 1.61 times less risky than Wasatch Small. It trades about 0.12 of its potential returns per unit of risk. Wasatch Small Cap is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,077 in Wasatch Small Cap on August 24, 2024 and sell it today you would earn a total of 154.00 from holding Wasatch Small Cap or generate 14.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Income Fund vs. Wasatch Small Cap
Performance |
| Timeline |
| Growth Income |
| Wasatch Small Cap |
Growth Income and Wasatch Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Income and Wasatch Small
The main advantage of trading using opposite Growth Income and Wasatch Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Income position performs unexpectedly, Wasatch 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 Wasatch Small will offset losses from the drop in Wasatch Small's long position.| Growth Income vs. Vanguard Small Cap Index | Growth Income vs. Vanguard Mid Cap Index | Growth Income vs. ABIVAX Socit Anonyme | Growth Income vs. SCOR PK |
| Wasatch Small vs. Vanguard Small Cap Index | Wasatch Small vs. Vanguard Small Cap Index | Wasatch Small vs. Vanguard Small Cap Index | Wasatch Small vs. Vanguard Small Cap Index |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |