Correlation Between Vanguard and Jacob Asset

Can any of the company-specific risk be diversified away by investing in both Vanguard and Jacob Asset 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 and Jacob Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vanguard SP Small Cap and Jacob Asset Management, you can compare the effects of market volatilities on Vanguard and Jacob Asset 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 with a short position of Jacob Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard and Jacob Asset.

Diversification Opportunities for Vanguard and Jacob Asset

0.0

Correlation Coefficient

Vanguard  Jacob Asset

Pay attention - limited upside

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

Pair Corralation between Vanguard and Jacob Asset

If you would invest (100.00) in Jacob Asset Management on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Jacob Asset Management or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Vanguard SP Small Cap  vs.  Jacob Asset Management

Vanguard SP Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vanguard SP Small Cap has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Etf's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the Exchange Traded Fund stockholders.

Jacob Asset Management

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jacob Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Jacob Asset is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Vanguard and Jacob Asset

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

The idea behind Vanguard SP Small Cap and Jacob Asset Management 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.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.