Correlation Between Smallcap World and Qs International
Can any of the company-specific risk be diversified away by investing in both Smallcap World and Qs International 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 Smallcap World and Qs International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smallcap World Fund and Qs International Equity, you can compare the effects of market volatilities on Smallcap World and Qs International 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 Smallcap World with a short position of Qs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap World and Qs International.
Diversification Opportunities for Smallcap World and Qs International
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Smallcap and LMEAX is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap World Fund and Qs International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qs International Equity and Smallcap World 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 Smallcap World Fund are associated (or correlated) with Qs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qs International Equity has no effect on the direction of Smallcap World i.e., Smallcap World and Qs International go up and down completely randomly.
Pair Corralation between Smallcap World and Qs International
Assuming the 90 days horizon Smallcap World Fund is expected to generate 1.1 times more return on investment than Qs International. However, Smallcap World is 1.1 times more volatile than Qs International Equity. It trades about 0.08 of its potential returns per unit of risk. Qs International Equity is currently generating about 0.07 per unit of risk. If you would invest 6,518 in Smallcap World Fund on March 18, 2025 and sell it today you would earn a total of 515.00 from holding Smallcap World Fund or generate 7.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smallcap World Fund vs. Qs International Equity
Performance |
| Timeline |
| Smallcap World |
| Qs International Equity |
Smallcap World and Qs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smallcap World and Qs International
The main advantage of trading using opposite Smallcap World and Qs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smallcap World position performs unexpectedly, Qs International 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 Qs International will offset losses from the drop in Qs International's long position.| Smallcap World vs. Absolute Convertible Arbitrage | Smallcap World vs. Calamos Dynamic Convertible | Smallcap World vs. Gabelli Convertible And | Smallcap World vs. Lord Abbett Convertible |
| Qs International vs. Highland Longshort Healthcare | Qs International vs. Invesco Global Health | Qs International vs. T Rowe Price | Qs International vs. Tekla Healthcare Investors |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |