Correlation Between Vanguard Small and Syntax

Can any of the company-specific risk be diversified away by investing in both Vanguard Small and Syntax 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 Syntax 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 Syntax, you can compare the effects of market volatilities on Vanguard Small and Syntax 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 Syntax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small and Syntax.

Diversification Opportunities for Vanguard Small and Syntax

0.0

Correlation Coefficient

Vanguard Small  Syntax

Pay attention - limited upside

The 3 months correlation between Vanguard and Syntax is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Value and Syntax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syntax 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 Syntax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Syntax has no effect on the direction of Vanguard Small i.e., Vanguard Small and Syntax go up and down completely randomly.

Pair Corralation between Vanguard Small and Syntax

If you would invest  4,416  in Syntax on October 6, 2024 and sell it today you would earn a total of  0.00  from holding Syntax or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Vanguard Small Cap Value  vs.  Syntax

Vanguard Small Cap

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Small Cap Value are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental drivers, Vanguard Small is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Syntax

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Syntax has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Syntax is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vanguard Small and Syntax

The main advantage of trading using opposite Vanguard Small and Syntax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small position performs unexpectedly, Syntax 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 Syntax will offset losses from the drop in Syntax's long position.

The idea behind Vanguard Small Cap Value and Syntax pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.