Correlation Between Vanguard Growth and SmartStop Self

Can any of the company-specific risk be diversified away by investing in both Vanguard Growth and SmartStop Self 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 Growth and SmartStop Self into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vanguard Growth Index and SmartStop Self Storage, you can compare the effects of market volatilities on Vanguard Growth and SmartStop Self 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 Growth with a short position of SmartStop Self. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Growth and SmartStop Self.

Diversification Opportunities for Vanguard Growth and SmartStop Self

0.85

Correlation Coefficient

Vanguard Growth  SmartStop Self

Very poor diversification

The 3 months correlation between Vanguard and SmartStop is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Growth Index and SmartStop Self Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartStop Self Storage and Vanguard Growth 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 Growth Index are associated (or correlated) with SmartStop Self. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartStop Self Storage has no effect on the direction of Vanguard Growth i.e., Vanguard Growth and SmartStop Self go up and down completely randomly.

Pair Corralation between Vanguard Growth and SmartStop Self

Assuming the 90 days horizon Vanguard Growth is expected to generate 1.13 times less return on investment than SmartStop Self. In addition to that, Vanguard Growth is 1.61 times more volatile than SmartStop Self Storage. It trades about 0.08 of its total potential returns per unit of risk. SmartStop Self Storage is currently generating about 0.14 per unit of volatility. If you would invest  3,250  in SmartStop Self Storage on March 21, 2025 and sell it today you would earn a total of  381.00  from holding SmartStop Self Storage or generate 11.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	88.71%
Values	Daily Returns

Vanguard Growth Index  vs.  SmartStop Self Storage

Vanguard Growth Index

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Growth Index are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vanguard Growth may actually be approaching a critical reversion point that can send shares even higher in July 2025.

SmartStop Self Storage

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SmartStop Self Storage are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating primary indicators, SmartStop Self sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vanguard Growth and SmartStop Self

The main advantage of trading using opposite Vanguard Growth and SmartStop Self positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Growth position performs unexpectedly, SmartStop Self 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 SmartStop Self will offset losses from the drop in SmartStop Self's long position.

The idea behind Vanguard Growth Index and SmartStop Self Storage pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.