Correlation Between Vanguard Small-cap and Lazard Small
Can any of the company-specific risk be diversified away by investing in both Vanguard Small-cap and Lazard 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 Lazard 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 Index and Lazard Small Mid Cap, you can compare the effects of market volatilities on Vanguard Small-cap and Lazard 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 Lazard Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small-cap and Lazard Small.
Diversification Opportunities for Vanguard Small-cap and Lazard Small
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Lazard is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Index and Lazard Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Small Mid 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 Index are associated (or correlated) with Lazard Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Small Mid has no effect on the direction of Vanguard Small-cap i.e., Vanguard Small-cap and Lazard Small go up and down completely randomly.
Pair Corralation between Vanguard Small-cap and Lazard Small
Assuming the 90 days horizon Vanguard Small Cap Index is expected to generate 0.86 times more return on investment than Lazard Small. However, Vanguard Small Cap Index is 1.17 times less risky than Lazard Small. It trades about 0.39 of its potential returns per unit of risk. Lazard Small Mid Cap is currently generating about 0.28 per unit of risk. If you would invest 32,767 in Vanguard Small Cap Index on September 4, 2024 and sell it today you would earn a total of 3,238 from holding Vanguard Small Cap Index or generate 9.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Vanguard Small Cap Index vs. Lazard Small Mid Cap
Performance |
| Timeline |
| Vanguard Small Cap |
| Lazard Small Mid |
Vanguard Small-cap and Lazard Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small-cap and Lazard Small
The main advantage of trading using opposite Vanguard Small-cap and Lazard Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small-cap position performs unexpectedly, Lazard 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 Lazard Small will offset losses from the drop in Lazard Small's long position.| Vanguard Small-cap vs. John Hancock Funds | Vanguard Small-cap vs. Legg Mason Partners | Vanguard Small-cap vs. T Rowe Price | Vanguard Small-cap vs. T Rowe Price |
| Lazard Small vs. Lazard Small Mid Cap | Lazard Small vs. Lazard International Equity | Lazard Small vs. Lazard International Small | Lazard Small vs. Loomis Sayles Small |
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 Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |