Correlation Between Vanguard Total and Pacer Lunt
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Pacer Lunt 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 Pacer Lunt 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 Pacer Lunt Large, you can compare the effects of market volatilities on Vanguard Total and Pacer Lunt 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 Pacer Lunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Pacer Lunt.
Diversification Opportunities for Vanguard Total and Pacer Lunt
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vanguard and Pacer is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Bond and Pacer Lunt Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Lunt Large 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 Pacer Lunt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Lunt Large has no effect on the direction of Vanguard Total i.e., Vanguard Total and Pacer Lunt go up and down completely randomly.
Pair Corralation between Vanguard Total and Pacer Lunt
Considering the 90-day investment horizon Vanguard Total is expected to generate 5.18 times less return on investment than Pacer Lunt. But when comparing it to its historical volatility, Vanguard Total Bond is 2.18 times less risky than Pacer Lunt. It trades about 0.04 of its potential returns per unit of risk. Pacer Lunt Large is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,483 in Pacer Lunt Large on September 14, 2024 and sell it today you would earn a total of 1,645 from holding Pacer Lunt Large or generate 47.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Vanguard Total Bond vs. Pacer Lunt Large
Performance |
| Timeline |
| Vanguard Total Bond |
| Pacer Lunt Large |
Vanguard Total and Pacer Lunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Pacer Lunt
The main advantage of trading using opposite Vanguard Total and Pacer Lunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Pacer Lunt 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 Pacer Lunt will offset losses from the drop in Pacer Lunt'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 |
| Pacer Lunt vs. Vanguard SP 500 | Pacer Lunt vs. Vanguard Real Estate | Pacer Lunt vs. Vanguard Total Bond | Pacer Lunt vs. Vanguard High Dividend |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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