Correlation Between Pro-blend(r) Moderate and Vanguard Emerging
Can any of the company-specific risk be diversified away by investing in both Pro-blend(r) Moderate and Vanguard Emerging 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 Pro-blend(r) Moderate and Vanguard Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pro Blend Moderate Term and Vanguard Emerging Markets, you can compare the effects of market volatilities on Pro-blend(r) Moderate and Vanguard Emerging 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 Pro-blend(r) Moderate with a short position of Vanguard Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pro-blend(r) Moderate and Vanguard Emerging.
Diversification Opportunities for Pro-blend(r) Moderate and Vanguard Emerging
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pro-blend(r) and Vanguard is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Pro Blend Moderate Term and Vanguard Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Emerging Markets and Pro-blend(r) Moderate 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 Pro Blend Moderate Term are associated (or correlated) with Vanguard Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Emerging Markets has no effect on the direction of Pro-blend(r) Moderate i.e., Pro-blend(r) Moderate and Vanguard Emerging go up and down completely randomly.
Pair Corralation between Pro-blend(r) Moderate and Vanguard Emerging
Assuming the 90 days horizon Pro-blend(r) Moderate is expected to generate 1.57 times less return on investment than Vanguard Emerging. But when comparing it to its historical volatility, Pro Blend Moderate Term is 2.78 times less risky than Vanguard Emerging. It trades about 0.08 of its potential returns per unit of risk. Vanguard Emerging Markets is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,066 in Vanguard Emerging Markets on August 25, 2024 and sell it today you would earn a total of 182.00 from holding Vanguard Emerging Markets or generate 8.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pro Blend Moderate Term vs. Vanguard Emerging Markets
Performance |
| Timeline |
| Pro-blend(r) Moderate |
| Vanguard Emerging Markets |
Pro-blend(r) Moderate and Vanguard Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pro-blend(r) Moderate and Vanguard Emerging
The main advantage of trading using opposite Pro-blend(r) Moderate and Vanguard Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pro-blend(r) Moderate position performs unexpectedly, Vanguard Emerging 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 Emerging will offset losses from the drop in Vanguard Emerging's long position.| Pro-blend(r) Moderate vs. Manning Napier Callodine | Pro-blend(r) Moderate vs. Manning Napier Callodine | Pro-blend(r) Moderate vs. Manning Napier Callodine | Pro-blend(r) Moderate vs. Pro Blend Extended Term |
| Vanguard Emerging vs. Pro Blend Moderate Term | Vanguard Emerging vs. Qs Moderate Growth | Vanguard Emerging vs. Target Retirement 2040 | Vanguard Emerging vs. Jp Morgan Smartretirement |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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