Correlation Between Vanguard Explorer and Westcore Small-cap
Can any of the company-specific risk be diversified away by investing in both Vanguard Explorer and Westcore Small-cap 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 Westcore Small-cap 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 Westcore Small Cap Growth, you can compare the effects of market volatilities on Vanguard Explorer and Westcore Small-cap 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 Westcore Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Explorer and Westcore Small-cap.
Diversification Opportunities for Vanguard Explorer and Westcore Small-cap
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and Westcore is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Explorer Fund and Westcore Small Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westcore 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 Westcore Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westcore Small Cap has no effect on the direction of Vanguard Explorer i.e., Vanguard Explorer and Westcore Small-cap go up and down completely randomly.
Pair Corralation between Vanguard Explorer and Westcore Small-cap
Assuming the 90 days horizon Vanguard Explorer is expected to generate 1.25 times less return on investment than Westcore Small-cap. But when comparing it to its historical volatility, Vanguard Explorer Fund is 1.18 times less risky than Westcore Small-cap. It trades about 0.35 of its potential returns per unit of risk. Westcore Small Cap Growth is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 2,059 in Westcore Small Cap Growth on September 1, 2024 and sell it today you would earn a total of 249.00 from holding Westcore Small Cap Growth or generate 12.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vanguard Explorer Fund vs. Westcore Small Cap Growth
Performance |
| Timeline |
| Vanguard Explorer |
| Westcore Small Cap |
Vanguard Explorer and Westcore Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Explorer and Westcore Small-cap
The main advantage of trading using opposite Vanguard Explorer and Westcore Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Explorer position performs unexpectedly, Westcore Small-cap 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 Westcore Small-cap will offset losses from the drop in Westcore Small-cap'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 |
| Westcore Small-cap vs. Segall Bryant Hamill | Westcore Small-cap vs. Segall Bryant Hamill | Westcore Small-cap vs. Segall Bryant Hamill | Westcore Small-cap vs. Segall Bryant Hamill |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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