Correlation Between Barclays Capital and Vanguard FTSE
Can any of the company-specific risk be diversified away by investing in both Barclays Capital and Vanguard FTSE 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 FTSE 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 FTSE Developed, you can compare the effects of market volatilities on Barclays Capital and Vanguard FTSE 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 FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays Capital and Vanguard FTSE.
Diversification Opportunities for Barclays Capital and Vanguard FTSE
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barclays and Vanguard is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Capital and Vanguard FTSE Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard FTSE Developed 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 FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard FTSE Developed has no effect on the direction of Barclays Capital i.e., Barclays Capital and Vanguard FTSE go up and down completely randomly.
Pair Corralation between Barclays Capital and Vanguard FTSE
If you would invest 4,941 in Vanguard FTSE Developed on September 13, 2024 and sell it today you would earn a total of 83.00 from holding Vanguard FTSE Developed or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Barclays Capital vs. Vanguard FTSE Developed
Performance |
| Timeline |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Vanguard FTSE Developed |
Barclays Capital and Vanguard FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays Capital and Vanguard FTSE
The main advantage of trading using opposite Barclays Capital and Vanguard FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays Capital position performs unexpectedly, Vanguard FTSE 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 FTSE will offset losses from the drop in Vanguard FTSE's long position.| Barclays Capital vs. United States Oil | Barclays Capital vs. Invesco DB Oil | Barclays Capital vs. ProShares Ultra Bloomberg | Barclays Capital vs. United States Natural |
| Vanguard FTSE vs. Vanguard FTSE Emerging | Vanguard FTSE vs. Vanguard Small Cap Index | Vanguard FTSE vs. Vanguard Value Index | Vanguard FTSE vs. Vanguard Small Cap Value |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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