Correlation Between IA Clarington and Vanguard Growth
Can any of the company-specific risk be diversified away by investing in both IA Clarington and Vanguard Growth 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 IA Clarington and Vanguard Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IA Clarington Strategic and Vanguard Growth Portfolio, you can compare the effects of market volatilities on IA Clarington and Vanguard Growth 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 IA Clarington with a short position of Vanguard Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of IA Clarington and Vanguard Growth.
Diversification Opportunities for IA Clarington and Vanguard Growth
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ISIF and Vanguard is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding IA Clarington Strategic and Vanguard Growth Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Growth Portfolio and IA Clarington 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 IA Clarington Strategic are associated (or correlated) with Vanguard Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Growth Portfolio has no effect on the direction of IA Clarington i.e., IA Clarington and Vanguard Growth go up and down completely randomly.
Pair Corralation between IA Clarington and Vanguard Growth
Assuming the 90 days trading horizon IA Clarington is expected to generate 3.8 times less return on investment than Vanguard Growth. But when comparing it to its historical volatility, IA Clarington Strategic is 1.32 times less risky than Vanguard Growth. It trades about 0.18 of its potential returns per unit of risk. Vanguard Growth Portfolio is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest 3,645 in Vanguard Growth Portfolio on September 1, 2024 and sell it today you would earn a total of 169.00 from holding Vanguard Growth Portfolio or generate 4.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
IA Clarington Strategic vs. Vanguard Growth Portfolio
Performance |
| Timeline |
| IA Clarington Strategic |
| Vanguard Growth Portfolio |
IA Clarington and Vanguard Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IA Clarington and Vanguard Growth
The main advantage of trading using opposite IA Clarington and Vanguard Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IA Clarington position performs unexpectedly, Vanguard Growth 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 Growth will offset losses from the drop in Vanguard Growth's long position.| IA Clarington vs. Brompton Global Dividend | IA Clarington vs. Global Healthcare Income | IA Clarington vs. Tech Leaders Income | IA Clarington vs. Brompton North American |
| Vanguard Growth vs. Vanguard All Equity ETF | Vanguard Growth vs. Vanguard Balanced Portfolio | Vanguard Growth vs. iShares Core Growth | Vanguard Growth vs. Vanguard SP 500 |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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