Correlation Between Vanguard Explorer and Eagle Small
Can any of the company-specific risk be diversified away by investing in both Vanguard Explorer and Eagle 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 Explorer and Eagle Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Explorer Value and Eagle Small Cap, you can compare the effects of market volatilities on Vanguard Explorer and Eagle 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 Explorer with a short position of Eagle Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Explorer and Eagle Small.
Diversification Opportunities for Vanguard Explorer and Eagle Small
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VANGUARD and Eagle is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Explorer Value and Eagle Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Small Cap and Vanguard Explorer 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 Explorer Value are associated (or correlated) with Eagle Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Small Cap has no effect on the direction of Vanguard Explorer i.e., Vanguard Explorer and Eagle Small go up and down completely randomly.
Pair Corralation between Vanguard Explorer and Eagle Small
Assuming the 90 days horizon Vanguard Explorer is expected to generate 1.11 times less return on investment than Eagle Small. In addition to that, Vanguard Explorer is 1.03 times more volatile than Eagle Small Cap. It trades about 0.18 of its total potential returns per unit of risk. Eagle Small Cap is currently generating about 0.2 per unit of volatility. If you would invest 2,502 in Eagle Small Cap on August 24, 2024 and sell it today you would earn a total of 160.00 from holding Eagle Small Cap or generate 6.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Explorer Value vs. Eagle Small Cap
Performance |
| Timeline |
| Vanguard Explorer Value |
| Eagle Small Cap |
Vanguard Explorer and Eagle Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Explorer and Eagle Small
The main advantage of trading using opposite Vanguard Explorer and Eagle Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Explorer position performs unexpectedly, Eagle 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 Eagle Small will offset losses from the drop in Eagle Small's long position.| Vanguard Explorer vs. Vanguard Strategic Small Cap | Vanguard Explorer vs. Vanguard Emerging Markets | Vanguard Explorer vs. Vanguard Diversified Equity | Vanguard Explorer vs. Vanguard Mid Cap |
| Eagle Small vs. Dodge Cox Stock | Eagle Small vs. Americafirst Large Cap | Eagle Small vs. Qs Large Cap | Eagle Small vs. Fidelity Series 1000 |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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