| VBK Etf | | | USD 249.43 0.09 0.04% |
The current 90-days correlation between Vanguard Small Cap and Vanguard SP Small Cap is 0.9 (i.e., Almost no diversification). A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Vanguard Small moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Vanguard Small Cap Growth moves in either direction, the perfectly negatively correlated security will move in the opposite direction.
Vanguard Small Correlation With Market
Very poor diversification
The correlation between Vanguard Small Cap Growth and DJI is 0.81 (i.e., Very poor diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Growth and DJI in the same portfolio, assuming nothing else is changed.
Check out
World Market Map to better understand how to build diversified portfolios, which includes a position in Vanguard Small Cap Growth. Also, note that the market value of any etf could be closely tied with the direction of predictive economic indicators such as
signals in bureau of labor statistics.