Correlation Between Volatility Shares and Vanguard Intermediate
Can any of the company-specific risk be diversified away by investing in both Volatility Shares and Vanguard Intermediate 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 Volatility Shares and Vanguard Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volatility Shares Trust and Vanguard Intermediate Term Bond, you can compare the effects of market volatilities on Volatility Shares and Vanguard Intermediate 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 Volatility Shares with a short position of Vanguard Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volatility Shares and Vanguard Intermediate.
Diversification Opportunities for Volatility Shares and Vanguard Intermediate
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Volatility and Vanguard is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Volatility Shares Trust and Vanguard Intermediate Term Bon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Intermediate and Volatility 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 Volatility Shares Trust are associated (or correlated) with Vanguard Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Intermediate has no effect on the direction of Volatility Shares i.e., Volatility Shares and Vanguard Intermediate go up and down completely randomly.
Pair Corralation between Volatility Shares and Vanguard Intermediate
Given the investment horizon of 90 days Volatility Shares Trust is expected to generate 20.99 times more return on investment than Vanguard Intermediate. However, Volatility Shares is 20.99 times more volatile than Vanguard Intermediate Term Bond. It trades about 0.24 of its potential returns per unit of risk. Vanguard Intermediate Term Bond is currently generating about 0.1 per unit of risk. If you would invest 5,388 in Volatility Shares Trust on September 18, 2024 and sell it today you would earn a total of 1,667 from holding Volatility Shares Trust or generate 30.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volatility Shares Trust vs. Vanguard Intermediate Term Bon
Performance |
| Timeline |
| Volatility Shares Trust |
| Vanguard Intermediate |
Volatility Shares and Vanguard Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volatility Shares and Vanguard Intermediate
The main advantage of trading using opposite Volatility Shares and Vanguard Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volatility Shares position performs unexpectedly, Vanguard Intermediate 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 Intermediate will offset losses from the drop in Vanguard Intermediate's long position.| Volatility Shares vs. Bitwise Crypto Industry | Volatility Shares vs. Grayscale Bitcoin Mini | Volatility Shares vs. First Trust SkyBridge |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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