Correlation Between Perkins Small and Large Cap
Can any of the company-specific risk be diversified away by investing in both Perkins Small and Large Cap 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 Perkins Small and Large Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perkins Small Cap and Large Cap Value, you can compare the effects of market volatilities on Perkins Small and Large Cap 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 Perkins Small with a short position of Large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perkins Small and Large Cap.
Diversification Opportunities for Perkins Small and Large Cap
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Perkins and Large is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Perkins Small Cap and Large Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Value and Perkins 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 Perkins Small Cap are associated (or correlated) with Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Value has no effect on the direction of Perkins Small i.e., Perkins Small and Large Cap go up and down completely randomly.
Pair Corralation between Perkins Small and Large Cap
Assuming the 90 days horizon Perkins Small Cap is expected to generate 1.85 times more return on investment than Large Cap. However, Perkins Small is 1.85 times more volatile than Large Cap Value. It trades about 0.19 of its potential returns per unit of risk. Large Cap Value is currently generating about 0.15 per unit of risk. If you would invest 2,061 in Perkins Small Cap on May 31, 2025 and sell it today you would earn a total of 298.00 from holding Perkins Small Cap or generate 14.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perkins Small Cap vs. Large Cap Value
Performance |
| Timeline |
| Perkins Small Cap |
| Large Cap Value |
Perkins Small and Large Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perkins Small and Large Cap
The main advantage of trading using opposite Perkins Small and Large Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perkins Small position performs unexpectedly, Large Cap 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 Large Cap will offset losses from the drop in Large Cap's long position.| Perkins Small vs. Janus Overseas Fund | Perkins Small vs. Janus Balanced Fund | Perkins Small vs. Perkins Mid Cap | Perkins Small vs. Janus Enterprise Fund |
| Large Cap vs. Omni Small Cap Value | Large Cap vs. Lsv Small Cap | Large Cap vs. Boston Partners Small | Large Cap vs. American Century Etf |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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