Correlation Between Vanguard Small and SPDR Kensho
Can any of the company-specific risk be diversified away by investing in both Vanguard Small and SPDR Kensho 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 SPDR Kensho 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 SPDR Kensho Intelligent, you can compare the effects of market volatilities on Vanguard Small and SPDR Kensho 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 SPDR Kensho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small and SPDR Kensho.
Diversification Opportunities for Vanguard Small and SPDR Kensho
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vanguard and SPDR is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Index and SPDR Kensho Intelligent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Kensho Intelligent 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 Index are associated (or correlated) with SPDR Kensho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Kensho Intelligent has no effect on the direction of Vanguard Small i.e., Vanguard Small and SPDR Kensho go up and down completely randomly.
Pair Corralation between Vanguard Small and SPDR Kensho
Allowing for the 90-day total investment horizon Vanguard Small is expected to generate 4.23 times less return on investment than SPDR Kensho. But when comparing it to its historical volatility, Vanguard Small Cap Index is 1.47 times less risky than SPDR Kensho. It trades about 0.08 of its potential returns per unit of risk. SPDR Kensho Intelligent is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 3,705 in SPDR Kensho Intelligent on July 20, 2025 and sell it today you would earn a total of 893.00 from holding SPDR Kensho Intelligent or generate 24.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Small Cap Index vs. SPDR Kensho Intelligent
Performance |
| Timeline |
| Vanguard Small Cap |
| SPDR Kensho Intelligent |
Vanguard Small and SPDR Kensho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small and SPDR Kensho
The main advantage of trading using opposite Vanguard Small and SPDR Kensho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small position performs unexpectedly, SPDR Kensho 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 SPDR Kensho will offset losses from the drop in SPDR Kensho's long position.| Vanguard Small vs. Vanguard Small Cap Index | Vanguard Small vs. Vanguard Mid Cap Index | Vanguard Small vs. Vanguard Mid Cap Index | Vanguard Small vs. Vanguard Mid Cap Index |
| SPDR Kensho vs. SPDR STOXX Europe | SPDR Kensho vs. SPDR Bloomberg Barclays | SPDR Kensho vs. SPDR Kensho Future | SPDR Kensho vs. SPDR SP Kensho |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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