Correlation Between Vanguard Small and PHLX Swiss
Can any of the company-specific risk be diversified away by investing in both Vanguard Small and PHLX Swiss 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 Vanguard Small and PHLX Swiss into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Small Cap Index and PHLX Swiss Franc, you can compare the effects of market volatilities on Vanguard Small and PHLX Swiss 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 Vanguard Small with a short position of PHLX Swiss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small and PHLX Swiss.
Diversification Opportunities for Vanguard Small and PHLX Swiss
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vanguard and PHLX is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Index and PHLX Swiss Franc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHLX Swiss Franc and Vanguard Small 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 Vanguard Small Cap Index are associated (or correlated) with PHLX Swiss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHLX Swiss Franc has no effect on the direction of Vanguard Small i.e., Vanguard Small and PHLX Swiss go up and down completely randomly.
Pair Corralation between Vanguard Small and PHLX Swiss
Allowing for the 90-day total investment horizon Vanguard Small Cap Index is expected to generate 1.97 times more return on investment than PHLX Swiss. However, Vanguard Small is 1.97 times more volatile than PHLX Swiss Franc. It trades about 0.38 of its potential returns per unit of risk. PHLX Swiss Franc is currently generating about -0.14 per unit of risk. If you would invest 23,687 in Vanguard Small Cap Index on September 4, 2024 and sell it today you would earn a total of 2,306 from holding Vanguard Small Cap Index or generate 9.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Vanguard Small Cap Index vs. PHLX Swiss Franc
Performance |
| Timeline |
Vanguard Small and PHLX Swiss Volatility Contrast
Predicted Return Density |
| Returns |
Vanguard Small Cap Index
Pair trading matchups for Vanguard Small
PHLX Swiss Franc
Pair trading matchups for PHLX Swiss
Pair Trading with Vanguard Small and PHLX Swiss
The main advantage of trading using opposite Vanguard Small and PHLX Swiss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small position performs unexpectedly, PHLX Swiss 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 PHLX Swiss will offset losses from the drop in PHLX Swiss' long position.| Vanguard Small vs. Invesco DWA Emerging | Vanguard Small vs. SCOR PK | Vanguard Small vs. HUMANA INC | Vanguard Small vs. Aquagold International |
| PHLX Swiss vs. Air Products and | PHLX Swiss vs. Stepan Company | PHLX Swiss vs. Mativ Holdings | PHLX Swiss vs. JD Sports Fashion |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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