Correlation Between Vanguard Small and Allianzgi Small

Can any of the company-specific risk be diversified away by investing in both Vanguard Small and Allianzgi 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 and Allianzgi 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 Index and Allianzgi Small Cap Fund, you can compare the effects of market volatilities on Vanguard Small and Allianzgi 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 with a short position of Allianzgi Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small and Allianzgi Small.

Diversification Opportunities for Vanguard Small and Allianzgi Small

0.88

Correlation Coefficient

Vanguard Small  Allianzgi Small

Very poor diversification

The 3 months correlation between Vanguard and Allianzgi is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Index and Allianzgi Small Cap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Small Cap and Vanguard Small 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 Allianzgi Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Small Cap has no effect on the direction of Vanguard Small i.e., Vanguard Small and Allianzgi Small go up and down completely randomly.

Pair Corralation between Vanguard Small and Allianzgi Small

Assuming the 90 days horizon Vanguard Small is expected to generate 1.11 times less return on investment than Allianzgi Small. In addition to that, Vanguard Small is 1.07 times more volatile than Allianzgi Small Cap Fund. It trades about 0.05 of its total potential returns per unit of risk. Allianzgi Small Cap Fund is currently generating about 0.06 per unit of volatility. If you would invest  1,885  in Allianzgi Small Cap Fund on September 2, 2025 and sell it today you would earn a total of  705.00  from holding Allianzgi Small Cap Fund or generate 37.4% 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 Index  vs.  Allianzgi Small Cap Fund

Vanguard Small Cap

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Small Cap Index are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Vanguard Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Allianzgi Small Cap

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Small Cap Fund are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Allianzgi Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vanguard Small and Allianzgi Small

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

The idea behind Vanguard Small Cap Index and Allianzgi Small Cap Fund 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..