Correlation Between Xtrackers and Vanguard ESG
Can any of the company-specific risk be diversified away by investing in both Xtrackers and Vanguard ESG 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 Xtrackers and Vanguard ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers SP 500 and Vanguard ESG International, you can compare the effects of market volatilities on Xtrackers and Vanguard ESG 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 Xtrackers with a short position of Vanguard ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers and Vanguard ESG.
Diversification Opportunities for Xtrackers and Vanguard ESG
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and Vanguard is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers SP 500 and Vanguard ESG International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard ESG Interna and Xtrackers 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 Xtrackers SP 500 are associated (or correlated) with Vanguard ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard ESG Interna has no effect on the direction of Xtrackers i.e., Xtrackers and Vanguard ESG go up and down completely randomly.
Pair Corralation between Xtrackers and Vanguard ESG
Given the investment horizon of 90 days Xtrackers SP 500 is expected to generate 0.82 times more return on investment than Vanguard ESG. However, Xtrackers SP 500 is 1.21 times less risky than Vanguard ESG. It trades about 0.37 of its potential returns per unit of risk. Vanguard ESG International is currently generating about -0.01 per unit of risk. If you would invest 5,213 in Xtrackers SP 500 on September 2, 2024 and sell it today you would earn a total of 292.00 from holding Xtrackers SP 500 or generate 5.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers SP 500 vs. Vanguard ESG International
Performance |
| Timeline |
| Xtrackers SP 500 |
| Vanguard ESG Interna |
Xtrackers and Vanguard ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers and Vanguard ESG
The main advantage of trading using opposite Xtrackers and Vanguard ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers position performs unexpectedly, Vanguard ESG 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 ESG will offset losses from the drop in Vanguard ESG's long position.| Xtrackers vs. Xtrackers MSCI USA | Xtrackers vs. iShares ESG MSCI | Xtrackers vs. SPDR SP 500 | Xtrackers vs. iShares MSCI USA |
| Vanguard ESG vs. Vanguard ESG Stock | Vanguard ESG vs. Vanguard ESG Corporate | Vanguard ESG vs. Vanguard International Dividend | Vanguard ESG vs. iShares ESG Aware |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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