Correlation Between Vanguard Total and BondBloxx ETF
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and BondBloxx ETF 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 Vanguard Total and BondBloxx ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Bond and BondBloxx ETF Trust, you can compare the effects of market volatilities on Vanguard Total and BondBloxx ETF 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 Vanguard Total with a short position of BondBloxx ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and BondBloxx ETF.
Diversification Opportunities for Vanguard Total and BondBloxx ETF
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and BondBloxx is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Bond and BondBloxx ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BondBloxx ETF Trust and Vanguard Total 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 Vanguard Total Bond are associated (or correlated) with BondBloxx ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BondBloxx ETF Trust has no effect on the direction of Vanguard Total i.e., Vanguard Total and BondBloxx ETF go up and down completely randomly.
Pair Corralation between Vanguard Total and BondBloxx ETF
Considering the 90-day investment horizon Vanguard Total Bond is expected to under-perform the BondBloxx ETF. But the etf apears to be less risky and, when comparing its historical volatility, Vanguard Total Bond is 1.06 times less risky than BondBloxx ETF. The etf trades about -0.09 of its potential returns per unit of risk. The BondBloxx ETF Trust is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,512 in BondBloxx ETF Trust on August 25, 2024 and sell it today you would earn a total of 12.00 from holding BondBloxx ETF Trust or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total Bond vs. BondBloxx ETF Trust
Performance |
| Timeline |
| Vanguard Total Bond |
| BondBloxx ETF Trust |
Vanguard Total and BondBloxx ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and BondBloxx ETF
The main advantage of trading using opposite Vanguard Total and BondBloxx ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, BondBloxx ETF 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 BondBloxx ETF will offset losses from the drop in BondBloxx ETF's long position.| Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Total Stock | Vanguard Total vs. Vanguard Real Estate |
| BondBloxx ETF vs. BondBloxx ETF Trust | BondBloxx ETF vs. Virtus ETF Trust | BondBloxx ETF vs. Ocean Park High | BondBloxx ETF vs. Virtus ETF Trust |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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