Correlation Between Vanguard Mega and Congress Large
Can any of the company-specific risk be diversified away by investing in both Vanguard Mega and Congress Large 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 Mega and Congress Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Mega Cap and Congress Large Cap, you can compare the effects of market volatilities on Vanguard Mega and Congress Large 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 Mega with a short position of Congress Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Mega and Congress Large.
Diversification Opportunities for Vanguard Mega and Congress Large
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and Congress is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Mega Cap and Congress Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Congress Large Cap and Vanguard Mega 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 Mega Cap are associated (or correlated) with Congress Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Congress Large Cap has no effect on the direction of Vanguard Mega i.e., Vanguard Mega and Congress Large go up and down completely randomly.
Pair Corralation between Vanguard Mega and Congress Large
Considering the 90-day investment horizon Vanguard Mega Cap is expected to generate 1.21 times more return on investment than Congress Large. However, Vanguard Mega is 1.21 times more volatile than Congress Large Cap. It trades about 0.12 of its potential returns per unit of risk. Congress Large Cap is currently generating about 0.12 per unit of risk. If you would invest 17,941 in Vanguard Mega Cap on August 30, 2024 and sell it today you would earn a total of 15,757 from holding Vanguard Mega Cap or generate 87.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 65.05% |
| Values | Daily Returns |
Vanguard Mega Cap vs. Congress Large Cap
Performance |
| Timeline |
| Vanguard Mega Cap |
| Congress Large Cap |
Vanguard Mega and Congress Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Mega and Congress Large
The main advantage of trading using opposite Vanguard Mega and Congress Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Mega position performs unexpectedly, Congress Large 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 Congress Large will offset losses from the drop in Congress Large's long position.| Vanguard Mega vs. Vanguard Mega Cap | Vanguard Mega vs. Vanguard Mid Cap Growth | Vanguard Mega vs. Vanguard Growth Index | Vanguard Mega vs. Vanguard Small Cap Growth |
| Congress Large vs. FT Vest Equity | Congress Large vs. Northern Lights | Congress Large vs. Dimensional International High | Congress Large vs. First Trust Exchange Traded |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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