Correlation Between Vanguard Explorer and Nuveen Small
Can any of the company-specific risk be diversified away by investing in both Vanguard Explorer and Nuveen 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 Nuveen Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Explorer Fund and Nuveen Small Cap, you can compare the effects of market volatilities on Vanguard Explorer and Nuveen 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 Nuveen Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Explorer and Nuveen Small.
Diversification Opportunities for Vanguard Explorer and Nuveen Small
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Nuveen is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Explorer Fund and Nuveen Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen 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 Fund are associated (or correlated) with Nuveen Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Small Cap has no effect on the direction of Vanguard Explorer i.e., Vanguard Explorer and Nuveen Small go up and down completely randomly.
Pair Corralation between Vanguard Explorer and Nuveen Small
Assuming the 90 days horizon Vanguard Explorer is expected to generate 1.57 times less return on investment than Nuveen Small. But when comparing it to its historical volatility, Vanguard Explorer Fund is 1.32 times less risky than Nuveen Small. It trades about 0.25 of its potential returns per unit of risk. Nuveen Small Cap is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,561 in Nuveen Small Cap on August 25, 2024 and sell it today you would earn a total of 283.00 from holding Nuveen Small Cap or generate 11.05% 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 Fund vs. Nuveen Small Cap
Performance |
| Timeline |
| Vanguard Explorer |
| Nuveen Small Cap |
Vanguard Explorer and Nuveen Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Explorer and Nuveen Small
The main advantage of trading using opposite Vanguard Explorer and Nuveen Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Explorer position performs unexpectedly, Nuveen 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 Nuveen Small will offset losses from the drop in Nuveen Small's long position.| Vanguard Explorer vs. Vanguard International Growth | Vanguard Explorer vs. Vanguard Windsor Ii | Vanguard Explorer vs. Vanguard Primecap Fund | Vanguard Explorer vs. Vanguard Growth Fund |
| Nuveen Small vs. Vanguard Small Cap Growth | Nuveen Small vs. Vanguard Small Cap Growth | Nuveen Small vs. Vanguard Explorer Fund | Nuveen Small vs. Vanguard Explorer Fund |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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