Correlation Between Vanguard Small-cap and Gateway Fund
Can any of the company-specific risk be diversified away by investing in both Vanguard Small-cap and Gateway Fund 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 Gateway Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Small Cap Value and Gateway Fund Class, you can compare the effects of market volatilities on Vanguard Small-cap and Gateway Fund 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 Gateway Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small-cap and Gateway Fund.
Diversification Opportunities for Vanguard Small-cap and Gateway Fund
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Gateway is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Value and Gateway Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gateway Fund Class 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 Value are associated (or correlated) with Gateway Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gateway Fund Class has no effect on the direction of Vanguard Small-cap i.e., Vanguard Small-cap and Gateway Fund go up and down completely randomly.
Pair Corralation between Vanguard Small-cap and Gateway Fund
Assuming the 90 days horizon Vanguard Small Cap Value is expected to generate 3.17 times more return on investment than Gateway Fund. However, Vanguard Small-cap is 3.17 times more volatile than Gateway Fund Class. It trades about 0.18 of its potential returns per unit of risk. Gateway Fund Class is currently generating about 0.26 per unit of risk. If you would invest 4,521 in Vanguard Small Cap Value on June 13, 2025 and sell it today you would earn a total of 486.00 from holding Vanguard Small Cap Value or generate 10.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Small Cap Value vs. Gateway Fund Class
Performance |
| Timeline |
| Vanguard Small Cap |
| Gateway Fund Class |
Vanguard Small-cap and Gateway Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small-cap and Gateway Fund
The main advantage of trading using opposite Vanguard Small-cap and Gateway Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small-cap position performs unexpectedly, Gateway Fund 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 Gateway Fund will offset losses from the drop in Gateway Fund's long position.| Vanguard Small-cap vs. Calamos Dynamic Convertible | Vanguard Small-cap vs. Rationalpier 88 Convertible | Vanguard Small-cap vs. Lord Abbett Convertible | Vanguard Small-cap vs. Rationalpier 88 Convertible |
| Gateway Fund vs. Valic Company I | Gateway Fund vs. Vanguard Small Cap Value | Gateway Fund vs. Omni Small Cap Value | Gateway Fund vs. Ultrasmall Cap Profund Ultrasmall Cap |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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