Correlation Between Vanguard Small-cap and Jpmorgan International
Can any of the company-specific risk be diversified away by investing in both Vanguard Small-cap and Jpmorgan International 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 Jpmorgan International 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 Jpmorgan International Value, you can compare the effects of market volatilities on Vanguard Small-cap and Jpmorgan International 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 Jpmorgan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small-cap and Jpmorgan International.
Diversification Opportunities for Vanguard Small-cap and Jpmorgan International
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and Jpmorgan is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Value and Jpmorgan International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan International 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 Jpmorgan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan International has no effect on the direction of Vanguard Small-cap i.e., Vanguard Small-cap and Jpmorgan International go up and down completely randomly.
Pair Corralation between Vanguard Small-cap and Jpmorgan International
Assuming the 90 days horizon Vanguard Small Cap Value is expected to generate 1.53 times more return on investment than Jpmorgan International. However, Vanguard Small-cap is 1.53 times more volatile than Jpmorgan International Value. It trades about 0.32 of its potential returns per unit of risk. Jpmorgan International Value is currently generating about -0.02 per unit of risk. If you would invest 4,782 in Vanguard Small Cap Value on September 3, 2024 and sell it today you would earn a total of 396.00 from holding Vanguard Small Cap Value or generate 8.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Small Cap Value vs. Jpmorgan International Value
Performance |
| Timeline |
| Vanguard Small Cap |
| Jpmorgan International |
Vanguard Small-cap and Jpmorgan International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small-cap and Jpmorgan International
The main advantage of trading using opposite Vanguard Small-cap and Jpmorgan International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small-cap position performs unexpectedly, Jpmorgan International 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 Jpmorgan International will offset losses from the drop in Jpmorgan International's long position.| Vanguard Small-cap vs. T Rowe Price | Vanguard Small-cap vs. Fm Investments Large | Vanguard Small-cap vs. Touchstone Large Cap | Vanguard Small-cap vs. Semiconductor Ultrasector Profund |
| Jpmorgan International vs. Mutual Of America | Jpmorgan International vs. Ab Discovery Value | Jpmorgan International vs. Vanguard Small Cap Value | Jpmorgan International vs. Fpa Queens Road |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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