Correlation Between Vanguard Small-cap and Gurtin National

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

Diversification Opportunities for Vanguard Small-cap and Gurtin National

-0.03

Correlation Coefficient

Vanguard Small-cap  Gurtin National

Good diversification

The 3 months correlation between Vanguard and Gurtin is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Index and Gurtin National Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gurtin National Municipal 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 Gurtin National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gurtin National Municipal has no effect on the direction of Vanguard Small-cap i.e., Vanguard Small-cap and Gurtin National go up and down completely randomly.

Pair Corralation between Vanguard Small-cap and Gurtin National

Assuming the 90 days horizon Vanguard Small Cap Index is expected to under-perform the Gurtin National. In addition to that, Vanguard Small-cap is 5.84 times more volatile than Gurtin National Municipal. It trades about -0.1 of its total potential returns per unit of risk. Gurtin National Municipal is currently generating about 0.04 per unit of volatility. If you would invest  969.00  in Gurtin National Municipal on December 20, 2024 and sell it today you would earn a total of  4.00  from holding Gurtin National Municipal or generate 0.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Vanguard Small Cap Index  vs.  Gurtin National Municipal

Vanguard Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vanguard Small Cap Index has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Gurtin National Municipal

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gurtin National Municipal are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Gurtin National 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-cap and Gurtin National

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

The idea behind Vanguard Small Cap Index and Gurtin National Municipal 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.