Correlation Between Vanguard and OneAscent Small

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

By analyzing existing cross correlation between Vanguard SP Small Cap and OneAscent Small Cap, you can compare the effects of market volatilities on Vanguard and OneAscent 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 with a short position of OneAscent Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard and OneAscent Small.

Diversification Opportunities for Vanguard and OneAscent Small

0.99

Correlation Coefficient

Vanguard  OneAscent Small

No risk reduction

The 3 months correlation between Vanguard and OneAscent is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard SP Small Cap and OneAscent Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneAscent Small Cap and Vanguard 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 SP Small Cap are associated (or correlated) with OneAscent Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneAscent Small Cap has no effect on the direction of Vanguard i.e., Vanguard and OneAscent Small go up and down completely randomly.

Pair Corralation between Vanguard and OneAscent Small

Given the investment horizon of 90 days Vanguard SP Small Cap is expected to generate 1.05 times more return on investment than OneAscent Small. However, Vanguard is 1.05 times more volatile than OneAscent Small Cap. It trades about -0.07 of its potential returns per unit of risk. OneAscent Small Cap is currently generating about -0.09 per unit of risk. If you would invest  11,929  in Vanguard SP Small Cap on February 3, 2025 and sell it today you would lose (1,169) from holding Vanguard SP Small Cap or give up 9.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Vanguard SP Small Cap  vs.  OneAscent Small Cap

Vanguard SP Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vanguard SP Small Cap has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Etf's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the Exchange Traded Fund stockholders.

OneAscent Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days OneAscent Small Cap has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Etf's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Pair Trading with Vanguard and OneAscent Small

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

The idea behind Vanguard SP Small Cap and OneAscent Small Cap 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.