Correlation Between Barclays Capital and Vanguard Total
Can any of the company-specific risk be diversified away by investing in both Barclays Capital and Vanguard Total 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 Barclays Capital and Vanguard Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays Capital and Vanguard Total Stock, you can compare the effects of market volatilities on Barclays Capital and Vanguard Total 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 Barclays Capital with a short position of Vanguard Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays Capital and Vanguard Total.
Diversification Opportunities for Barclays Capital and Vanguard Total
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barclays and Vanguard is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Capital and Vanguard Total Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total Stock and Barclays Capital 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 Barclays Capital are associated (or correlated) with Vanguard Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total Stock has no effect on the direction of Barclays Capital i.e., Barclays Capital and Vanguard Total go up and down completely randomly.
Pair Corralation between Barclays Capital and Vanguard Total
Considering the 90-day investment horizon Barclays Capital is expected to generate 7.13 times less return on investment than Vanguard Total. In addition to that, Barclays Capital is 1.4 times more volatile than Vanguard Total Stock. It trades about 0.01 of its total potential returns per unit of risk. Vanguard Total Stock is currently generating about 0.11 per unit of volatility. If you would invest 19,494 in Vanguard Total Stock on September 3, 2024 and sell it today you would earn a total of 10,492 from holding Vanguard Total Stock or generate 53.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 30.1% |
| Values | Daily Returns |
Barclays Capital vs. Vanguard Total Stock
Performance |
| Timeline |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Vanguard Total Stock |
Barclays Capital and Vanguard Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays Capital and Vanguard Total
The main advantage of trading using opposite Barclays Capital and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays Capital position performs unexpectedly, Vanguard Total 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 Total will offset losses from the drop in Vanguard Total's long position.| Barclays Capital vs. Vanguard Total Stock | Barclays Capital vs. SPDR SP 500 | Barclays Capital vs. Vanguard Total Bond | Barclays Capital vs. Vanguard Value Index |
| Vanguard Total vs. Vanguard SP 500 | Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Real Estate | Vanguard Total vs. Vanguard Total Bond |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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