Correlation Between Vanguard and Global X
Can any of the company-specific risk be diversified away by investing in both Vanguard and Global X 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 and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard SP Mid Cap and Global X Adaptive, you can compare the effects of market volatilities on Vanguard and Global X 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 with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard and Global X.
Diversification Opportunities for Vanguard and Global X
No risk reduction
The 3 months correlation between Vanguard and Global is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard SP Mid Cap and Global X Adaptive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Adaptive and Vanguard 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 SP Mid Cap are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Adaptive has no effect on the direction of Vanguard i.e., Vanguard and Global X go up and down completely randomly.
Pair Corralation between Vanguard and Global X
Given the investment horizon of 90 days Vanguard SP Mid Cap is expected to generate 1.4 times more return on investment than Global X. However, Vanguard is 1.4 times more volatile than Global X Adaptive. It trades about 0.12 of its potential returns per unit of risk. Global X Adaptive is currently generating about 0.14 per unit of risk. If you would invest 8,886 in Vanguard SP Mid Cap on September 1, 2024 and sell it today you would earn a total of 1,540 from holding Vanguard SP Mid Cap or generate 17.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Vanguard SP Mid Cap vs. Global X Adaptive
Performance |
| Timeline |
| Vanguard SP Mid |
| Global X Adaptive |
Vanguard and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard and Global X
The main advantage of trading using opposite Vanguard and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Vanguard vs. Vanguard Mid Cap Value | Vanguard vs. SPDR SP Dividend | Vanguard vs. Pacer Cash Cows | Vanguard vs. iShares SP Mid Cap |
| Global X vs. Vanguard Mid Cap Value | Global X vs. SPDR SP Dividend | Global X vs. Pacer Cash Cows | Global X vs. iShares SP Mid Cap |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |