Correlation Between Vanguard Mega and GraniteShares XOUT
Can any of the company-specific risk be diversified away by investing in both Vanguard Mega and GraniteShares XOUT 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 GraniteShares XOUT 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 GraniteShares XOUT Large, you can compare the effects of market volatilities on Vanguard Mega and GraniteShares XOUT 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 GraniteShares XOUT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Mega and GraniteShares XOUT.
Diversification Opportunities for Vanguard Mega and GraniteShares XOUT
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and GraniteShares is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Mega Cap and GraniteShares XOUT Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares XOUT Large 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 GraniteShares XOUT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares XOUT Large has no effect on the direction of Vanguard Mega i.e., Vanguard Mega and GraniteShares XOUT go up and down completely randomly.
Pair Corralation between Vanguard Mega and GraniteShares XOUT
Considering the 90-day investment horizon Vanguard Mega Cap is expected to generate 0.98 times more return on investment than GraniteShares XOUT. However, Vanguard Mega Cap is 1.02 times less risky than GraniteShares XOUT. It trades about 0.11 of its potential returns per unit of risk. GraniteShares XOUT Large is currently generating about 0.09 per unit of risk. If you would invest 28,489 in Vanguard Mega Cap on September 3, 2024 and sell it today you would earn a total of 5,513 from holding Vanguard Mega Cap or generate 19.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Mega Cap vs. GraniteShares XOUT Large
Performance |
| Timeline |
| Vanguard Mega Cap |
| GraniteShares XOUT Large |
Vanguard Mega and GraniteShares XOUT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Mega and GraniteShares XOUT
The main advantage of trading using opposite Vanguard Mega and GraniteShares XOUT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Mega position performs unexpectedly, GraniteShares XOUT 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 GraniteShares XOUT will offset losses from the drop in GraniteShares XOUT'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 |
| GraniteShares XOUT vs. Vanguard Information Technology | GraniteShares XOUT vs. Technology Select Sector | GraniteShares XOUT vs. iShares Technology ETF | GraniteShares XOUT vs. VanEck Semiconductor ETF |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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