Correlation Between Acadian Emerging and Vanguard Global
Can any of the company-specific risk be diversified away by investing in both Acadian Emerging 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 Acadian Emerging and Vanguard Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acadian Emerging Markets and Vanguard Global Minimum, you can compare the effects of market volatilities on Acadian Emerging 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 Acadian Emerging with a short position of Vanguard Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadian Emerging and Vanguard Global.
Diversification Opportunities for Acadian Emerging and Vanguard Global
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Acadian and Vanguard is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Acadian Emerging Markets and Vanguard Global Minimum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Global Minimum and Acadian Emerging 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 Acadian Emerging Markets 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 Minimum has no effect on the direction of Acadian Emerging i.e., Acadian Emerging and Vanguard Global go up and down completely randomly.
Pair Corralation between Acadian Emerging and Vanguard Global
Assuming the 90 days horizon Acadian Emerging Markets is expected to generate 1.55 times more return on investment than Vanguard Global. However, Acadian Emerging is 1.55 times more volatile than Vanguard Global Minimum. It trades about 0.08 of its potential returns per unit of risk. Vanguard Global Minimum is currently generating about 0.09 per unit of risk. If you would invest 1,696 in Acadian Emerging Markets on August 30, 2024 and sell it today you would earn a total of 651.00 from holding Acadian Emerging Markets or generate 38.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acadian Emerging Markets vs. Vanguard Global Minimum
Performance |
| Timeline |
| Acadian Emerging Markets |
| Vanguard Global Minimum |
Acadian Emerging and Vanguard Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acadian Emerging and Vanguard Global
The main advantage of trading using opposite Acadian Emerging and Vanguard Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadian Emerging 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.| Acadian Emerging vs. Driehaus Emerging Markets | Acadian Emerging vs. Oakmark International Small | Acadian Emerging vs. T Rowe Price | Acadian Emerging vs. Emerging Markets Portfolio |
| Vanguard Global vs. Vanguard Emerging Markets | Vanguard Global vs. Vanguard Explorer Value | Vanguard Global vs. Vanguard Global Wellington | Vanguard Global vs. Vanguard Ultra Short Term Bond |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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