Correlation Between Smallcap World and Conquer Risk

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

By analyzing existing cross correlation between Smallcap World Fund and Conquer Risk Tactical, you can compare the effects of market volatilities on Smallcap World and Conquer Risk 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 Smallcap World with a short position of Conquer Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap World and Conquer Risk.

Diversification Opportunities for Smallcap World and Conquer Risk

0.0

Correlation Coefficient

Smallcap World  Conquer Risk

Pay attention - limited upside

The 3 months correlation between Smallcap and Conquer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap World Fund and Conquer Risk Tactical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conquer Risk Tactical and Smallcap World 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 Smallcap World Fund are associated (or correlated) with Conquer Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conquer Risk Tactical has no effect on the direction of Smallcap World i.e., Smallcap World and Conquer Risk go up and down completely randomly.

Pair Corralation between Smallcap World and Conquer Risk

If you would invest  6,946  in Smallcap World Fund on May 26, 2025 and sell it today you would earn a total of  638.00  from holding Smallcap World Fund or generate 9.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Smallcap World Fund  vs.  Conquer Risk Tactical

Smallcap World

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Smallcap World Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Smallcap World may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Conquer Risk Tactical

Risk-Adjusted Performance

Solid

Over the last 90 days Conquer Risk Tactical has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Conquer Risk is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Smallcap World and Conquer Risk

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

The idea behind Smallcap World Fund and Conquer Risk Tactical 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.