Correlation Between Value Line and Smallcap Fund

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

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

Diversification Opportunities for Value Line and Smallcap Fund

0.0

Correlation Coefficient

Value Line  Smallcap Fund

Pay attention - limited upside

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

Pair Corralation between Value Line and Smallcap Fund

If you would invest  2,561  in Smallcap Fund Fka on July 7, 2025 and sell it today you would earn a total of  244.00  from holding Smallcap Fund Fka or generate 9.53% return on investment over 90 days.

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

Value Line Select  vs.  Smallcap Fund Fka

Value Line Select

Risk-Adjusted Performance

Weakest

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

Smallcap Fund Fka

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Smallcap Fund Fka are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Smallcap Fund may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Value Line and Smallcap Fund

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

The idea behind Value Line Select and Smallcap Fund Fka 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.

Check out your portfolio center.

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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.