Correlation Between Vanguard Small-cap and Tributary Small/mid
Can any of the company-specific risk be diversified away by investing in both Vanguard Small-cap and Tributary Small/mid 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 Tributary Small/mid 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 Tributary Smallmid Cap, you can compare the effects of market volatilities on Vanguard Small-cap and Tributary Small/mid 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 Tributary Small/mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small-cap and Tributary Small/mid.
Diversification Opportunities for Vanguard Small-cap and Tributary Small/mid
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Tributary is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Index and Tributary Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tributary Smallmid Cap 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 Tributary Small/mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tributary Smallmid Cap has no effect on the direction of Vanguard Small-cap i.e., Vanguard Small-cap and Tributary Small/mid go up and down completely randomly.
Pair Corralation between Vanguard Small-cap and Tributary Small/mid
Assuming the 90 days horizon Vanguard Small-cap is expected to generate 1.26 times less return on investment than Tributary Small/mid. But when comparing it to its historical volatility, Vanguard Small Cap Index is 1.02 times less risky than Tributary Small/mid. It trades about 0.22 of its potential returns per unit of risk. Tributary Smallmid Cap is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,582 in Tributary Smallmid Cap on April 13, 2025 and sell it today you would earn a total of 77.00 from holding Tributary Smallmid Cap or generate 4.87% 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 Index vs. Tributary Smallmid Cap
Performance |
| Timeline |
| Vanguard Small Cap |
| Tributary Smallmid Cap |
Vanguard Small-cap and Tributary Small/mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small-cap and Tributary Small/mid
The main advantage of trading using opposite Vanguard Small-cap and Tributary Small/mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small-cap position performs unexpectedly, Tributary Small/mid 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 Tributary Small/mid will offset losses from the drop in Tributary Small/mid's long position.| Vanguard Small-cap vs. Vanguard Mid Cap Index | Vanguard Small-cap vs. Vanguard Total Bond | Vanguard Small-cap vs. Vanguard Institutional Index | Vanguard Small-cap vs. Vanguard Total International |
| Tributary Small/mid vs. Artisan High Income | Tributary Small/mid vs. Needham Aggressive Growth | Tributary Small/mid vs. Ab High Income | Tributary Small/mid vs. Prudential High Yield |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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