Correlation Between Leverage Shares and Vanguard Global
Can any of the company-specific risk be diversified away by investing in both Leverage Shares and Vanguard Global 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 Leverage Shares and Vanguard Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leverage Shares 2x and Vanguard Global Aggregate, you can compare the effects of market volatilities on Leverage Shares and Vanguard Global 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 Leverage Shares with a short position of Vanguard Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leverage Shares and Vanguard Global.
Diversification Opportunities for Leverage Shares and Vanguard Global
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Leverage and Vanguard is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 2x and Vanguard Global Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Global Aggregate and Leverage Shares 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 Leverage Shares 2x are associated (or correlated) with Vanguard Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Global Aggregate has no effect on the direction of Leverage Shares i.e., Leverage Shares and Vanguard Global go up and down completely randomly.
Pair Corralation between Leverage Shares and Vanguard Global
Assuming the 90 days trading horizon Leverage Shares 2x is expected to under-perform the Vanguard Global. In addition to that, Leverage Shares is 12.77 times more volatile than Vanguard Global Aggregate. It trades about -0.05 of its total potential returns per unit of risk. Vanguard Global Aggregate is currently generating about 0.2 per unit of volatility. If you would invest 2,555 in Vanguard Global Aggregate on September 1, 2024 and sell it today you would earn a total of 32.00 from holding Vanguard Global Aggregate or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Leverage Shares 2x vs. Vanguard Global Aggregate
Performance |
| Timeline |
| Leverage Shares 2x |
| Vanguard Global Aggregate |
Leverage Shares and Vanguard Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leverage Shares and Vanguard Global
The main advantage of trading using opposite Leverage Shares and Vanguard Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leverage Shares position performs unexpectedly, Vanguard Global 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 Global will offset losses from the drop in Vanguard Global's long position.| Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x |
| Vanguard Global vs. Vanguard USD Corporate | Vanguard Global vs. Vanguard USD Corporate | Vanguard Global vs. Vanguard FTSE All World | Vanguard Global vs. Vanguard SP 500 |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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