Correlation Between Global X and Vanguard Real
Can any of the company-specific risk be diversified away by investing in both Global X and Vanguard Real 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 Global X and Vanguard Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X SuperDividend and Vanguard Real Estate, you can compare the effects of market volatilities on Global X and Vanguard Real 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 Global X with a short position of Vanguard Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Vanguard Real.
Diversification Opportunities for Global X and Vanguard Real
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Vanguard is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Global X SuperDividend and Vanguard Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Real Estate and Global X 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 Global X SuperDividend are associated (or correlated) with Vanguard Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Real Estate has no effect on the direction of Global X i.e., Global X and Vanguard Real go up and down completely randomly.
Pair Corralation between Global X and Vanguard Real
Given the investment horizon of 90 days Global X is expected to generate 2.05 times less return on investment than Vanguard Real. But when comparing it to its historical volatility, Global X SuperDividend is 1.07 times less risky than Vanguard Real. It trades about 0.03 of its potential returns per unit of risk. Vanguard Real Estate is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7,813 in Vanguard Real Estate on August 31, 2024 and sell it today you would earn a total of 2,003 from holding Vanguard Real Estate or generate 25.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Global X SuperDividend vs. Vanguard Real Estate
Performance |
| Timeline |
| Global X SuperDividend |
| Vanguard Real Estate |
Global X and Vanguard Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Vanguard Real
The main advantage of trading using opposite Global X and Vanguard Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Vanguard Real 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 Real will offset losses from the drop in Vanguard Real's long position.| Global X vs. Global X SuperDividend | Global X vs. Invesco KBW Premium | Global X vs. Global X SuperDividend | Global X vs. Invesco KBW High |
| Vanguard Real vs. Vanguard FTSE Emerging | Vanguard Real vs. Vanguard High Dividend | Vanguard Real vs. Vanguard Total Stock | Vanguard Real vs. Vanguard Total Bond |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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