Correlation Between Vanguard Small-cap and Adirondack Small
Can any of the company-specific risk be diversified away by investing in both Vanguard Small-cap and Adirondack Small 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 Adirondack Small 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 Adirondack Small Cap, you can compare the effects of market volatilities on Vanguard Small-cap and Adirondack Small 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 Adirondack Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small-cap and Adirondack Small.
Diversification Opportunities for Vanguard Small-cap and Adirondack Small
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vanguard and Adirondack is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Value and Adirondack Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adirondack Small 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 Value are associated (or correlated) with Adirondack Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adirondack Small Cap has no effect on the direction of Vanguard Small-cap i.e., Vanguard Small-cap and Adirondack Small go up and down completely randomly.
Pair Corralation between Vanguard Small-cap and Adirondack Small
Assuming the 90 days horizon Vanguard Small-cap is expected to generate 2.23 times less return on investment than Adirondack Small. But when comparing it to its historical volatility, Vanguard Small Cap Value is 1.04 times less risky than Adirondack Small. It trades about 0.06 of its potential returns per unit of risk. Adirondack Small Cap is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,233 in Adirondack Small Cap on August 15, 2025 and sell it today you would earn a total of 262.00 from holding Adirondack Small Cap or generate 8.1% 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 Value vs. Adirondack Small Cap
Performance |
| Timeline |
| Vanguard Small Cap |
| Adirondack Small Cap |
Vanguard Small-cap and Adirondack Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small-cap and Adirondack Small
The main advantage of trading using opposite Vanguard Small-cap and Adirondack Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small-cap position performs unexpectedly, Adirondack Small 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 Adirondack Small will offset losses from the drop in Adirondack Small's long position.| Vanguard Small-cap vs. Needham Aggressive Growth | Vanguard Small-cap vs. Ab Global Risk | Vanguard Small-cap vs. John Hancock High | Vanguard Small-cap vs. California High Yield Municipal |
| Adirondack Small vs. Nuveen Large Cap | Adirondack Small vs. Amg Managers Cadence | Adirondack Small vs. Jag Large Cap | Adirondack Small vs. Paradigm Value Fund |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |