Correlation Between Vanguard Total and JIB
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and JIB 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 JIB 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 JIB, you can compare the effects of market volatilities on Vanguard Total and JIB 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 JIB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and JIB.
Diversification Opportunities for Vanguard Total and JIB
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and JIB is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Bond and JIB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JIB 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 JIB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JIB has no effect on the direction of Vanguard Total i.e., Vanguard Total and JIB go up and down completely randomly.
Pair Corralation between Vanguard Total and JIB
If you would invest 4,199 in JIB on August 28, 2024 and sell it today you would earn a total of 0.00 from holding JIB or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 1.56% |
| Values | Daily Returns |
Vanguard Total Bond vs. JIB
Performance |
| Timeline |
| Vanguard Total Bond |
| JIB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Vanguard Total and JIB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and JIB
The main advantage of trading using opposite Vanguard Total and JIB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, JIB 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 JIB will offset losses from the drop in JIB'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 |
| JIB vs. iShares MSCI EAFE | JIB vs. iShares iBoxx Investment | JIB vs. iShares TIPS Bond | JIB vs. iShares 1 3 Year |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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