Correlation Between Aegis Value and Vanguard Explorer
Can any of the company-specific risk be diversified away by investing in both Aegis Value and Vanguard Explorer 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 Aegis Value and Vanguard Explorer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aegis Value Fund and Vanguard Explorer Fund, you can compare the effects of market volatilities on Aegis Value and Vanguard Explorer 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 Aegis Value with a short position of Vanguard Explorer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegis Value and Vanguard Explorer.
Diversification Opportunities for Aegis Value and Vanguard Explorer
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aegis and Vanguard is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Aegis Value Fund and Vanguard Explorer Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Explorer and Aegis Value 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 Aegis Value Fund are associated (or correlated) with Vanguard Explorer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Explorer has no effect on the direction of Aegis Value i.e., Aegis Value and Vanguard Explorer go up and down completely randomly.
Pair Corralation between Aegis Value and Vanguard Explorer
Assuming the 90 days horizon Aegis Value is expected to generate 1.23 times less return on investment than Vanguard Explorer. In addition to that, Aegis Value is 1.11 times more volatile than Vanguard Explorer Fund. It trades about 0.04 of its total potential returns per unit of risk. Vanguard Explorer Fund is currently generating about 0.06 per unit of volatility. If you would invest 10,655 in Vanguard Explorer Fund on September 12, 2024 and sell it today you would earn a total of 2,251 from holding Vanguard Explorer Fund or generate 21.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegis Value Fund vs. Vanguard Explorer Fund
Performance |
| Timeline |
| Aegis Value Fund |
| Vanguard Explorer |
Aegis Value and Vanguard Explorer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegis Value and Vanguard Explorer
The main advantage of trading using opposite Aegis Value and Vanguard Explorer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegis Value position performs unexpectedly, Vanguard Explorer 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 Explorer will offset losses from the drop in Vanguard Explorer's long position.| Aegis Value vs. T Rowe Price | Aegis Value vs. Blrc Sgy Mnp | Aegis Value vs. Transamerica Intermediate Muni | Aegis Value vs. Baird Strategic Municipal |
| Vanguard Explorer vs. Third Avenue Real | Vanguard Explorer vs. Aegis Value Fund | Vanguard Explorer vs. Litman Gregory Masters | Vanguard Explorer vs. Marsico Growth Fund |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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