Correlation Between Vanguard Total and Vanguard Intermediate
Can any of the company-specific risk be diversified away by investing in both Vanguard Total 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 Vanguard Total and Vanguard Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total International and Vanguard Intermediate Term Treasury, you can compare the effects of market volatilities on Vanguard Total 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 Vanguard Total with a short position of Vanguard Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Vanguard Intermediate.
Diversification Opportunities for Vanguard Total and Vanguard Intermediate
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vanguard and Vanguard is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total International and Vanguard Intermediate Term Tre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Intermediate 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 International 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 Vanguard Total i.e., Vanguard Total and Vanguard Intermediate go up and down completely randomly.
Pair Corralation between Vanguard Total and Vanguard Intermediate
Given the investment horizon of 90 days Vanguard Total International is expected to generate 0.67 times more return on investment than Vanguard Intermediate. However, Vanguard Total International is 1.49 times less risky than Vanguard Intermediate. It trades about 0.2 of its potential returns per unit of risk. Vanguard Intermediate Term Treasury is currently generating about 0.03 per unit of risk. If you would invest 4,988 in Vanguard Total International on August 30, 2024 and sell it today you would earn a total of 42.00 from holding Vanguard Total International or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Vanguard Total International vs. Vanguard Intermediate Term Tre
Performance |
| Timeline |
| Vanguard Total Inter |
| Vanguard Intermediate |
Vanguard Total and Vanguard Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Vanguard Intermediate
The main advantage of trading using opposite Vanguard Total and Vanguard Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total 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.| Vanguard Total vs. Vanguard Total Bond | Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Emerging Markets | Vanguard Total vs. Vanguard Short Term Inflation Protected |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |