Correlation Between Commodities Strategy and Vanguard Lifestrategy
Can any of the company-specific risk be diversified away by investing in both Commodities Strategy and Vanguard Lifestrategy 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 Commodities Strategy and Vanguard Lifestrategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commodities Strategy Fund and Vanguard Lifestrategy Moderate, you can compare the effects of market volatilities on Commodities Strategy and Vanguard Lifestrategy 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 Commodities Strategy with a short position of Vanguard Lifestrategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commodities Strategy and Vanguard Lifestrategy.
Diversification Opportunities for Commodities Strategy and Vanguard Lifestrategy
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Commodities and Vanguard is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Commodities Strategy Fund and Vanguard Lifestrategy Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Lifestrategy and Commodities Strategy 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 Commodities Strategy Fund are associated (or correlated) with Vanguard Lifestrategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Lifestrategy has no effect on the direction of Commodities Strategy i.e., Commodities Strategy and Vanguard Lifestrategy go up and down completely randomly.
Pair Corralation between Commodities Strategy and Vanguard Lifestrategy
Assuming the 90 days horizon Commodities Strategy Fund is expected to generate 1.82 times more return on investment than Vanguard Lifestrategy. However, Commodities Strategy is 1.82 times more volatile than Vanguard Lifestrategy Moderate. It trades about 0.13 of its potential returns per unit of risk. Vanguard Lifestrategy Moderate is currently generating about 0.15 per unit of risk. If you would invest 3,035 in Commodities Strategy Fund on November 4, 2024 and sell it today you would earn a total of 75.00 from holding Commodities Strategy Fund or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commodities Strategy Fund vs. Vanguard Lifestrategy Moderate
Performance |
| Timeline |
| Commodities Strategy |
| Vanguard Lifestrategy |
Commodities Strategy and Vanguard Lifestrategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commodities Strategy and Vanguard Lifestrategy
The main advantage of trading using opposite Commodities Strategy and Vanguard Lifestrategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commodities Strategy position performs unexpectedly, Vanguard Lifestrategy 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 Lifestrategy will offset losses from the drop in Vanguard Lifestrategy's long position.| Commodities Strategy vs. Basic Materials Fund | Commodities Strategy vs. Energy Services Fund | Commodities Strategy vs. Energy Fund Investor | Commodities Strategy vs. Real Estate Fund |
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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