Correlation Between Vanguard Small-cap and Hunter Small
Can any of the company-specific risk be diversified away by investing in both Vanguard Small-cap and Hunter 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 Small-cap and Hunter Small 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 Hunter Small Cap, you can compare the effects of market volatilities on Vanguard Small-cap and Hunter 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 Small-cap with a short position of Hunter Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small-cap and Hunter Small.
Diversification Opportunities for Vanguard Small-cap and Hunter Small
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Hunter is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Value and Hunter Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunter Small Cap 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 Hunter Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunter Small Cap has no effect on the direction of Vanguard Small-cap i.e., Vanguard Small-cap and Hunter Small go up and down completely randomly.
Pair Corralation between Vanguard Small-cap and Hunter Small
Assuming the 90 days horizon Vanguard Small Cap Value is expected to under-perform the Hunter Small. In addition to that, Vanguard Small-cap is 1.12 times more volatile than Hunter Small Cap. It trades about -0.31 of its total potential returns per unit of risk. Hunter Small Cap is currently generating about -0.33 per unit of volatility. If you would invest 1,313 in Hunter Small Cap on October 12, 2024 and sell it today you would lose (77.00) from holding Hunter Small Cap or give up 5.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Small Cap Value vs. Hunter Small Cap
Performance |
| Timeline |
| Vanguard Small Cap |
| Hunter Small Cap |
Vanguard Small-cap and Hunter Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small-cap and Hunter Small
The main advantage of trading using opposite Vanguard Small-cap and Hunter Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small-cap position performs unexpectedly, Hunter 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 Hunter Small will offset losses from the drop in Hunter Small's long position.| Vanguard Small-cap vs. T Rowe Price | Vanguard Small-cap vs. The Hartford Growth | Vanguard Small-cap vs. Artisan Small Cap | Vanguard Small-cap vs. Qs Growth Fund |
| Hunter Small vs. Artisan High Income | Hunter Small vs. Buffalo High Yield | Hunter Small vs. Siit High Yield | Hunter Small vs. T Rowe Price |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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