Correlation Between Vanguard Large-cap and Cambiar Smid
Can any of the company-specific risk be diversified away by investing in both Vanguard Large-cap and Cambiar 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 Large-cap and Cambiar Smid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Large Cap Index and Cambiar Smid Fund, you can compare the effects of market volatilities on Vanguard Large-cap and Cambiar 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 Large-cap with a short position of Cambiar Smid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Large-cap and Cambiar Smid.
Diversification Opportunities for Vanguard Large-cap and Cambiar Smid
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Vanguard and Cambiar is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Large Cap Index and Cambiar Smid Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambiar Smid and Vanguard Large-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 Large Cap Index are associated (or correlated) with Cambiar Smid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambiar Smid has no effect on the direction of Vanguard Large-cap i.e., Vanguard Large-cap and Cambiar Smid go up and down completely randomly.
Pair Corralation between Vanguard Large-cap and Cambiar Smid
Assuming the 90 days horizon Vanguard Large Cap Index is expected to generate 0.86 times more return on investment than Cambiar Smid. However, Vanguard Large Cap Index is 1.17 times less risky than Cambiar Smid. It trades about 0.09 of its potential returns per unit of risk. Cambiar Smid Fund is currently generating about -0.01 per unit of risk. If you would invest 49,773 in Vanguard Large Cap Index on November 28, 2024 and sell it today you would earn a total of 7,077 from holding Vanguard Large Cap Index or generate 14.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.46% |
| Values | Daily Returns |
Vanguard Large Cap Index vs. Cambiar Smid Fund
Performance |
| Timeline |
| Vanguard Large Cap |
| Cambiar Smid |
Vanguard Large-cap and Cambiar Smid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Large-cap and Cambiar Smid
The main advantage of trading using opposite Vanguard Large-cap and Cambiar Smid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Large-cap position performs unexpectedly, Cambiar 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 Cambiar Smid will offset losses from the drop in Cambiar Smid's long position.| Vanguard Large-cap vs. Morgan Stanley Institutional | Vanguard Large-cap vs. Vanguard Growth Index | Vanguard Large-cap vs. Oklahoma College Savings | Vanguard Large-cap vs. Multimanager Lifestyle Growth |
| Cambiar Smid vs. T Rowe Price | Cambiar Smid vs. Delaware Investments Ultrashort | Cambiar Smid vs. Angel Oak Ultrashort | Cambiar Smid vs. Transam Short Term Bond |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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