Correlation Between Bond Fund and Vanguard Total
Can any of the company-specific risk be diversified away by investing in both Bond Fund and Vanguard Total 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 Bond Fund and Vanguard Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bond Fund Of and Vanguard Total Bond, you can compare the effects of market volatilities on Bond Fund and Vanguard Total 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 Bond Fund with a short position of Vanguard Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bond Fund and Vanguard Total.
Diversification Opportunities for Bond Fund and Vanguard Total
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Bond and Vanguard is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Bond Fund Of and Vanguard Total Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total Bond and Bond Fund 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 Bond Fund Of are associated (or correlated) with Vanguard Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total Bond has no effect on the direction of Bond Fund i.e., Bond Fund and Vanguard Total go up and down completely randomly.
Pair Corralation between Bond Fund and Vanguard Total
Assuming the 90 days horizon Bond Fund is expected to generate 1.43 times less return on investment than Vanguard Total. In addition to that, Bond Fund is 1.02 times more volatile than Vanguard Total Bond. It trades about 0.13 of its total potential returns per unit of risk. Vanguard Total Bond is currently generating about 0.2 per unit of volatility. If you would invest 944.00 in Vanguard Total Bond on November 18, 2024 and sell it today you would earn a total of 11.00 from holding Vanguard Total Bond or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bond Fund Of vs. Vanguard Total Bond
Performance |
| Timeline |
| Bond Fund |
| Vanguard Total Bond |
Bond Fund and Vanguard Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bond Fund and Vanguard Total
The main advantage of trading using opposite Bond Fund and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bond Fund position performs unexpectedly, Vanguard Total 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 Total will offset losses from the drop in Vanguard Total's long position.| Bond Fund vs. Fwnhtx | Bond Fund vs. Fuhkbx | Bond Fund vs. Federated Emerging Market | Bond Fund vs. Small Pany Growth |
| Vanguard Total vs. Tax Managed Large Cap | Vanguard Total vs. Ftufox | Vanguard Total vs. Rational Dividend Capture | Vanguard Total vs. Fwnhtx |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |