Correlation Between Vanguard Small-cap and Artisan Thematic
Can any of the company-specific risk be diversified away by investing in both Vanguard Small-cap and Artisan Thematic 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-cap and Artisan Thematic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Small Cap Growth and Artisan Thematic Fund, you can compare the effects of market volatilities on Vanguard Small-cap and Artisan Thematic 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-cap with a short position of Artisan Thematic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small-cap and Artisan Thematic.
Diversification Opportunities for Vanguard Small-cap and Artisan Thematic
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VANGUARD and Artisan is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Growth and Artisan Thematic Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Thematic and Vanguard Small-cap 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 Growth are associated (or correlated) with Artisan Thematic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Thematic has no effect on the direction of Vanguard Small-cap i.e., Vanguard Small-cap and Artisan Thematic go up and down completely randomly.
Pair Corralation between Vanguard Small-cap and Artisan Thematic
Assuming the 90 days horizon Vanguard Small-cap is expected to generate 1.13 times less return on investment than Artisan Thematic. In addition to that, Vanguard Small-cap is 1.19 times more volatile than Artisan Thematic Fund. It trades about 0.11 of its total potential returns per unit of risk. Artisan Thematic Fund is currently generating about 0.15 per unit of volatility. If you would invest 1,784 in Artisan Thematic Fund on September 2, 2024 and sell it today you would earn a total of 739.00 from holding Artisan Thematic Fund or generate 41.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Small Cap Growth vs. Artisan Thematic Fund
Performance |
| Timeline |
| Vanguard Small Cap |
| Artisan Thematic |
Vanguard Small-cap and Artisan Thematic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small-cap and Artisan Thematic
The main advantage of trading using opposite Vanguard Small-cap and Artisan Thematic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small-cap position performs unexpectedly, Artisan Thematic 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 Artisan Thematic will offset losses from the drop in Artisan Thematic's long position.| Vanguard Small-cap vs. Vanguard International Growth | Vanguard Small-cap vs. Vanguard Windsor Ii | Vanguard Small-cap vs. Vanguard Primecap Fund | Vanguard Small-cap vs. Vanguard Growth Fund |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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