Small Cap Correlations

ANODX Fund  USD 21.74  0.06  0.28%   
The correlation of Small Cap is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak. If the correlation is 0, the equities are not correlated; they are entirely random.

Small Cap Correlation With Market

Poor diversification

The correlation between Small Cap Growth and DJI is 0.74 (i.e., Poor diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Growth and DJI in the same portfolio, assuming nothing else is changed.
  
Check out Trending Equities to better understand how to build diversified portfolios, which includes a position in Small Cap Growth. Also, note that the market value of any mutual fund could be closely tied with the direction of predictive economic indicators such as signals in unemployment.

Moving together with Small Mutual Fund

  0.94AMEIX Equity GrowthPairCorr
  0.92AMGIX Income GrowthPairCorr
  0.92TWCCX Ultra Fund CPairCorr
  0.87TWCAX Select Fund APairCorr
  0.91TWCIX Select Fund InvestorPairCorr
  0.92TWCGX Growth Fund InvestorPairCorr
  0.93TWBIX Balanced Fund InvestorPairCorr
  0.92TWCUX Ultra Fund InvestorPairCorr
  0.92TWGIX Growth Fund IPairCorr
  0.63TWGGX Global GrowthPairCorr
  0.97TWHIX Heritage Fund InvestorPairCorr
  0.92TWRCX Growth Fund CPairCorr
  0.76TWSAX Strategic AllocationPairCorr
  0.68TWSMX Strategic AllocationPairCorr
  0.91TWSIX Select Fund IPairCorr
  0.92TWUAX Ultra Fund APairCorr
  0.92TWUIX Ultra Fund IPairCorr

Moving against Small Mutual Fund

  0.7TWACX Short Term GovernmentPairCorr
  0.7TWAVX Short Term GovernmentPairCorr
  0.62CDBCX Diversified BondPairCorr
  0.4TWARX Short Term GovernmentPairCorr
  0.69TWUSX Short Term GovernmentPairCorr
  0.68TWUOX Short Term GovernmentPairCorr
  0.54ANTUX Nt Non IntrinsicPairCorr

Related Correlations Analysis

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Correlation Matchups

Over a given time period, the two securities move together when the Correlation Coefficient is positive. Conversely, the two assets move in opposite directions when the Correlation Coefficient is negative. Determining your positions' relationship to each other is valuable for analyzing and projecting your portfolio's future expected return and risk.
High positive correlations   
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QCMMIXHUCXX
0P000070L2HUCXX
  
High negative correlations   
0P000070L2QCMMIX
0P000070L2PBMXX
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0P000070L2JRSXX
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Risk-Adjusted Indicators

There is a big difference between Small Mutual Fund performing well and Small Cap Mutual Fund doing well as a business compared to the competition. There are so many exceptions to the norm that investors cannot definitively determine what's good or bad unless they analyze Small Cap's multiple risk-adjusted performance indicators across the competitive landscape. These indicators are quantitative in nature and help investors forecast volatility and risk-adjusted expected returns across various positions.