Correlation Between Vanguard Small-cap and Horizon Active
Can any of the company-specific risk be diversified away by investing in both Vanguard Small-cap and Horizon Active 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 Horizon Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Small Cap Value and Horizon Active Asset, you can compare the effects of market volatilities on Vanguard Small-cap and Horizon Active 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 Horizon Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small-cap and Horizon Active.
Diversification Opportunities for Vanguard Small-cap and Horizon Active
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vanguard and Horizon is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Value and Horizon Active Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Active Asset 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 Value are associated (or correlated) with Horizon Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Active Asset has no effect on the direction of Vanguard Small-cap i.e., Vanguard Small-cap and Horizon Active go up and down completely randomly.
Pair Corralation between Vanguard Small-cap and Horizon Active
Assuming the 90 days horizon Vanguard Small Cap Value is expected to generate 1.66 times more return on investment than Horizon Active. However, Vanguard Small-cap is 1.66 times more volatile than Horizon Active Asset. It trades about 0.25 of its potential returns per unit of risk. Horizon Active Asset is currently generating about 0.1 per unit of risk. If you would invest 4,830 in Vanguard Small Cap Value on August 31, 2024 and sell it today you would earn a total of 341.00 from holding Vanguard Small Cap Value or generate 7.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Small Cap Value vs. Horizon Active Asset
Performance |
| Timeline |
| Vanguard Small Cap |
| Horizon Active Asset |
Vanguard Small-cap and Horizon Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small-cap and Horizon Active
The main advantage of trading using opposite Vanguard Small-cap and Horizon Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small-cap position performs unexpectedly, Horizon Active 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 Horizon Active will offset losses from the drop in Horizon Active's long position.| Vanguard Small-cap vs. Goldman Sachs Esg | Vanguard Small-cap vs. Precious Metals And | Vanguard Small-cap vs. Franklin Gold Precious | Vanguard Small-cap vs. Europac Gold Fund |
| Horizon Active vs. Victory Rs Partners | Horizon Active vs. Amg River Road | Horizon Active vs. Vanguard Small Cap Value | Horizon Active vs. Ab Discovery Value |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |