Correlation Between Vanguard Small and Great West
Can any of the company-specific risk be diversified away by investing in both Vanguard Small and Great West 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 Great West 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 Great West Loomis Sayles, you can compare the effects of market volatilities on Vanguard Small and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small and Great West.
Diversification Opportunities for Vanguard Small and Great West
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Great is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Value and Great West Loomis Sayles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Loomis 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Loomis has no effect on the direction of Vanguard Small i.e., Vanguard Small and Great West go up and down completely randomly.
Pair Corralation between Vanguard Small and Great West
Assuming the 90 days horizon Vanguard Small Cap Value is expected to under-perform the Great West. But the mutual fund apears to be less risky and, when comparing its historical volatility, Vanguard Small Cap Value is 1.25 times less risky than Great West. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Great West Loomis Sayles is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 4,112 in Great West Loomis Sayles on September 13, 2024 and sell it today you would earn a total of 6.00 from holding Great West Loomis Sayles or generate 0.15% 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. Great West Loomis Sayles
Performance |
| Timeline |
| Vanguard Small Cap |
| Great West Loomis |
Vanguard Small and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small and Great West
The main advantage of trading using opposite Vanguard Small and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West's long position.| Vanguard Small vs. Allianzgi Diversified Income | Vanguard Small vs. Calvert Conservative Allocation | Vanguard Small vs. Stone Ridge Diversified | Vanguard Small vs. Federated Hermes Conservative |
| Great West vs. Great West Securefoundation Balanced | Great West vs. Great West Lifetime 2020 | Great West vs. Great West Lifetime 2020 | Great West vs. Great West Lifetime 2020 |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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