Correlation Between Auer Growth and Vanguard Windsor
Can any of the company-specific risk be diversified away by investing in both Auer Growth and Vanguard Windsor 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 Auer Growth and Vanguard Windsor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auer Growth Fund and Vanguard Windsor Fund, you can compare the effects of market volatilities on Auer Growth and Vanguard Windsor 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 Auer Growth with a short position of Vanguard Windsor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auer Growth and Vanguard Windsor.
Diversification Opportunities for Auer Growth and Vanguard Windsor
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Auer and Vanguard is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Auer Growth Fund and Vanguard Windsor Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Windsor and Auer Growth 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 Auer Growth Fund are associated (or correlated) with Vanguard Windsor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Windsor has no effect on the direction of Auer Growth i.e., Auer Growth and Vanguard Windsor go up and down completely randomly.
Pair Corralation between Auer Growth and Vanguard Windsor
Assuming the 90 days horizon Auer Growth Fund is expected to generate 1.39 times more return on investment than Vanguard Windsor. However, Auer Growth is 1.39 times more volatile than Vanguard Windsor Fund. It trades about 0.1 of its potential returns per unit of risk. Vanguard Windsor Fund is currently generating about -0.02 per unit of risk. If you would invest 1,729 in Auer Growth Fund on September 13, 2024 and sell it today you would earn a total of 24.00 from holding Auer Growth Fund or generate 1.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auer Growth Fund vs. Vanguard Windsor Fund
Performance |
| Timeline |
| Auer Growth Fund |
| Vanguard Windsor |
Auer Growth and Vanguard Windsor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auer Growth and Vanguard Windsor
The main advantage of trading using opposite Auer Growth and Vanguard Windsor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auer Growth position performs unexpectedly, Vanguard Windsor 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 Windsor will offset losses from the drop in Vanguard Windsor's long position.| Auer Growth vs. Lebenthal Lisanti Small | Auer Growth vs. Hodges Small Cap | Auer Growth vs. Schwartz Value Focused | Auer Growth vs. Oberweis Small Cap Opportunities |
| Vanguard Windsor vs. Vanguard Explorer Fund | Vanguard Windsor vs. Vanguard Primecap Fund | Vanguard Windsor vs. Vanguard Wellington Fund | Vanguard Windsor vs. Vanguard Windsor Ii |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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