Small Cap Correlations

Mutual Funds USA . 
Fund . Small Cap Index
The current 90-days correlation between Small Cap Index and Goldman Sachs Small is 0.71 (i.e., Poor diversification). The correlation of Small Cap is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak. If the correlation is 0, the equities are not correlated; they are entirely random.

Small Cap Correlation With Market

Poor diversification

The correlation between Small Cap Index and DJI is 0.62 (i.e., Poor diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Index and DJI in the same portfolio, assuming nothing else is changed.
  
Check out World Market Map to better understand how to build diversified portfolios. Also, note that the market value of any mutual fund could be closely tied with the direction of predictive economic indicators such as signals in bureau of economic analysis.

Moving together with Small Mutual Fund

  0.75VMSGX Mid Cap StrategicPairCorr
  0.82VAPPX Valic Company IPairCorr
  0.8VSRDX Valic Company IPairCorr
  0.79VSTIX Stock Index FundPairCorr
  0.75VBCVX Broad Cap ValuePairCorr
  0.89VCAAX Asset AllocationPairCorr
  0.71VCBDX Valic Company IPairCorr
  0.82VCBCX Blue Chip GrowthPairCorr
  0.8VCGAX Growth IncomePairCorr
  0.73VCGEX Emerging EconomiesPairCorr
  0.65VCGSX Government SecuritiesPairCorr
  0.64VCIFX International GovernmentPairCorr
  0.83VCINX International GrowthPairCorr
  0.78VCNIX Nasdaq 100 IndexPairCorr
  0.85VCSTX Science TechnologyPairCorr
  0.75VCTPX Inflation ProtectedPairCorr
  0.85VCULX Growth Fund GrowthPairCorr
  0.7VDAFX Dynamic AllocationPairCorr
  0.91VVSCX Valic Company IPairCorr
  0.68VGCLX Valic Company IPairCorr
  0.68VGLSX Global StrategyPairCorr
  0.75VHYLX Valic Company IPairCorr
  0.69VIOPX Valic Company IPairCorr
  0.62VLAGX Valic Company IPairCorr
  0.82VLSMX Valic Company IPairCorr
  0.83VSMAX Vanguard Small CapPairCorr
  0.83VSCIX Vanguard Small CapPairCorr
  0.83VSCPX Vanguard Small CapPairCorr
  0.82NAESX Vanguard Small CapPairCorr

Related Correlations Analysis


Risk-Adjusted Indicators

There is a big difference between Small Mutual Fund performing well and Small Cap Mutual Fund doing well as a business compared to the competition. There are so many exceptions to the norm that investors cannot definitively determine what's good or bad unless they analyze Small Cap's multiple risk-adjusted performance indicators across the competitive landscape. These indicators are quantitative in nature and help investors forecast volatility and risk-adjusted expected returns across various positions.

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