Correlation Between Perkins Small and Vanguard Reit

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

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

Diversification Opportunities for Perkins Small and Vanguard Reit

0.68

Correlation Coefficient

Perkins Small  Vanguard Reit

Poor diversification

The 3 months correlation between Perkins and Vanguard is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Perkins Small Cap and Vanguard Reit Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Reit Index and Perkins 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 Perkins Small Cap are associated (or correlated) with Vanguard Reit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Reit Index has no effect on the direction of Perkins Small i.e., Perkins Small and Vanguard Reit go up and down completely randomly.

Pair Corralation between Perkins Small and Vanguard Reit

Assuming the 90 days horizon Perkins Small Cap is expected to generate 1.32 times more return on investment than Vanguard Reit. However, Perkins Small is 1.32 times more volatile than Vanguard Reit Index. It trades about 0.11 of its potential returns per unit of risk. Vanguard Reit Index is currently generating about 0.0 per unit of risk. If you would invest  2,120  in Perkins Small Cap on May 19, 2025 and sell it today you would earn a total of  161.00  from holding Perkins Small Cap or generate 7.59% return on investment over 90 days.

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

Perkins Small Cap  vs.  Vanguard Reit Index

Perkins Small Cap

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Perkins Small Cap are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Perkins Small may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Vanguard Reit Index

Risk-Adjusted Performance

Weakest

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

Pair Trading with Perkins Small and Vanguard Reit

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

The idea behind Perkins Small Cap and Vanguard Reit Index 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.