Correlation Between Vanguard Small and Walden Smid
Can any of the company-specific risk be diversified away by investing in both Vanguard Small and Walden Smid 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 and Walden Smid 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 Walden Smid Cap, you can compare the effects of market volatilities on Vanguard Small and Walden Smid 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 with a short position of Walden Smid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small and Walden Smid.
Diversification Opportunities for Vanguard Small and Walden Smid
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Walden is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Value and Walden Smid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walden Smid Cap and Vanguard Small 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 Walden Smid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walden Smid Cap has no effect on the direction of Vanguard Small i.e., Vanguard Small and Walden Smid go up and down completely randomly.
Pair Corralation between Vanguard Small and Walden Smid
Assuming the 90 days horizon Vanguard Small is expected to generate 1.0 times less return on investment than Walden Smid. In addition to that, Vanguard Small is 1.04 times more volatile than Walden Smid Cap. It trades about 0.22 of its total potential returns per unit of risk. Walden Smid Cap is currently generating about 0.23 per unit of volatility. If you would invest 2,467 in Walden Smid Cap on November 1, 2024 and sell it today you would earn a total of 85.00 from holding Walden Smid Cap or generate 3.45% 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 Value vs. Walden Smid Cap
Performance |
| Timeline |
| Vanguard Small Cap |
| Walden Smid Cap |
Vanguard Small and Walden Smid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small and Walden Smid
The main advantage of trading using opposite Vanguard Small and Walden Smid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small position performs unexpectedly, Walden Smid 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 Walden Smid will offset losses from the drop in Walden Smid's long position.| Vanguard Small vs. Global Gold Fund | Vanguard Small vs. Invesco Gold Special | Vanguard Small vs. Short Precious Metals | Vanguard Small vs. James Balanced Golden |
| Walden Smid vs. Boston Trust Midcap | Walden Smid vs. Walden Equity Fund | Walden Smid vs. Mid Cap Value | Walden Smid vs. Blackrock Total Stock |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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