Correlation Between Vanguard Extended and Bondbloxx ETF
Can any of the company-specific risk be diversified away by investing in both Vanguard Extended 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 Extended 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 Extended Duration and Bondbloxx ETF Trust, you can compare the effects of market volatilities on Vanguard Extended 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 Extended with a short position of Bondbloxx ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Extended and Bondbloxx ETF.
Diversification Opportunities for Vanguard Extended and Bondbloxx ETF
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Bondbloxx is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Extended Duration 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 Extended 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 Extended Duration 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 Extended i.e., Vanguard Extended and Bondbloxx ETF go up and down completely randomly.
Pair Corralation between Vanguard Extended and Bondbloxx ETF
Considering the 90-day investment horizon Vanguard Extended Duration is expected to under-perform the Bondbloxx ETF. In addition to that, Vanguard Extended is 4.68 times more volatile than Bondbloxx ETF Trust. It trades about -0.19 of its total potential returns per unit of risk. Bondbloxx ETF Trust is currently generating about -0.27 per unit of volatility. If you would invest 4,985 in Bondbloxx ETF Trust on August 25, 2024 and sell it today you would lose (160.00) from holding Bondbloxx ETF Trust or give up 3.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Extended Duration vs. Bondbloxx ETF Trust
Performance |
| Timeline |
| Vanguard Extended |
| Bondbloxx ETF Trust |
Vanguard Extended and Bondbloxx ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Extended and Bondbloxx ETF
The main advantage of trading using opposite Vanguard Extended and Bondbloxx ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Extended 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 Extended vs. iShares Treasury Floating | Vanguard Extended vs. iShares iBonds Dec | Vanguard Extended vs. iShares iBonds Dec | Vanguard Extended vs. iShares 0 3 Month |
| Bondbloxx ETF vs. Vanguard Long Term Treasury | Bondbloxx ETF vs. Vanguard Short Term Treasury | Bondbloxx ETF vs. Vanguard Intermediate Term Corporate | Bondbloxx ETF vs. Vanguard Mortgage Backed Securities |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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