Correlation Between Vanguard Small-cap and Aberdeen Select
Can any of the company-specific risk be diversified away by investing in both Vanguard Small-cap and Aberdeen Select 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 Aberdeen Select 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 Aberdeen Select International, you can compare the effects of market volatilities on Vanguard Small-cap and Aberdeen Select 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 Aberdeen Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small-cap and Aberdeen Select.
Diversification Opportunities for Vanguard Small-cap and Aberdeen Select
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vanguard and Aberdeen is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Value and Aberdeen Select International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Select Inte 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 Aberdeen Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Select Inte has no effect on the direction of Vanguard Small-cap i.e., Vanguard Small-cap and Aberdeen Select go up and down completely randomly.
Pair Corralation between Vanguard Small-cap and Aberdeen Select
Assuming the 90 days horizon Vanguard Small Cap Value is expected to generate 1.27 times more return on investment than Aberdeen Select. However, Vanguard Small-cap is 1.27 times more volatile than Aberdeen Select International. It trades about 0.09 of its potential returns per unit of risk. Aberdeen Select International is currently generating about 0.02 per unit of risk. If you would invest 4,302 in Vanguard Small Cap Value on August 25, 2024 and sell it today you would earn a total of 828.00 from holding Vanguard Small Cap Value or generate 19.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Small Cap Value vs. Aberdeen Select International
Performance |
| Timeline |
| Vanguard Small Cap |
| Aberdeen Select Inte |
Vanguard Small-cap and Aberdeen Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small-cap and Aberdeen Select
The main advantage of trading using opposite Vanguard Small-cap and Aberdeen Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small-cap position performs unexpectedly, Aberdeen Select 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 Aberdeen Select will offset losses from the drop in Aberdeen Select's long position.| Vanguard Small-cap vs. Short Oil Gas | Vanguard Small-cap vs. World Energy Fund | Vanguard Small-cap vs. Franklin Natural Resources | Vanguard Small-cap vs. Franklin Natural Resources |
| Aberdeen Select vs. Fpa Queens Road | Aberdeen Select vs. Vanguard Small Cap Value | Aberdeen Select vs. Palm Valley Capital | Aberdeen Select vs. Small Cap Value Series |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |