Correlation Between BetaPro Crude and Vanguard Canadian
Can any of the company-specific risk be diversified away by investing in both BetaPro Crude and Vanguard Canadian 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 BetaPro Crude and Vanguard Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro Crude Oil and Vanguard Canadian Short, you can compare the effects of market volatilities on BetaPro Crude and Vanguard Canadian 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 BetaPro Crude with a short position of Vanguard Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro Crude and Vanguard Canadian.
Diversification Opportunities for BetaPro Crude and Vanguard Canadian
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BetaPro and Vanguard is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro Crude Oil and Vanguard Canadian Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Canadian Short and BetaPro Crude 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 BetaPro Crude Oil are associated (or correlated) with Vanguard Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Canadian Short has no effect on the direction of BetaPro Crude i.e., BetaPro Crude and Vanguard Canadian go up and down completely randomly.
Pair Corralation between BetaPro Crude and Vanguard Canadian
Assuming the 90 days trading horizon BetaPro Crude Oil is expected to under-perform the Vanguard Canadian. In addition to that, BetaPro Crude is 30.1 times more volatile than Vanguard Canadian Short. It trades about -0.02 of its total potential returns per unit of risk. Vanguard Canadian Short is currently generating about 0.24 per unit of volatility. If you would invest 2,234 in Vanguard Canadian Short on August 29, 2024 and sell it today you would earn a total of 87.00 from holding Vanguard Canadian Short or generate 3.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro Crude Oil vs. Vanguard Canadian Short
Performance |
| Timeline |
| BetaPro Crude Oil |
| Vanguard Canadian Short |
BetaPro Crude and Vanguard Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro Crude and Vanguard Canadian
The main advantage of trading using opposite BetaPro Crude and Vanguard Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro Crude position performs unexpectedly, Vanguard Canadian 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 Canadian will offset losses from the drop in Vanguard Canadian's long position.| BetaPro Crude vs. BetaPro Canadian Gold | BetaPro Crude vs. BetaPro Crude Oil | BetaPro Crude vs. BetaPro Natural Gas | BetaPro Crude vs. BetaPro SPTSX Capped |
| Vanguard Canadian vs. Vanguard Canadian Short Term | Vanguard Canadian vs. Vanguard Canadian Aggregate | Vanguard Canadian vs. iShares Canadian Short | Vanguard Canadian vs. Vanguard FTSE Developed |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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