Correlation Between Vident Core and Capital Group
Can any of the company-specific risk be diversified away by investing in both Vident Core and Capital Group 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 Vident Core and Capital Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vident Core Bond and Capital Group Core, you can compare the effects of market volatilities on Vident Core and Capital Group 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 Vident Core with a short position of Capital Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vident Core and Capital Group.
Diversification Opportunities for Vident Core and Capital Group
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vident and Capital is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Vident Core Bond and Capital Group Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Group Core and Vident Core 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 Vident Core Bond are associated (or correlated) with Capital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Group Core has no effect on the direction of Vident Core i.e., Vident Core and Capital Group go up and down completely randomly.
Pair Corralation between Vident Core and Capital Group
Given the investment horizon of 90 days Vident Core is expected to generate 1.82 times less return on investment than Capital Group. In addition to that, Vident Core is 1.02 times more volatile than Capital Group Core. It trades about 0.08 of its total potential returns per unit of risk. Capital Group Core is currently generating about 0.15 per unit of volatility. If you would invest 2,220 in Capital Group Core on November 2, 2024 and sell it today you would earn a total of 18.00 from holding Capital Group Core or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vident Core Bond vs. Capital Group Core
Performance |
| Timeline |
| Vident Core Bond |
| Capital Group Core |
Vident Core and Capital Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vident Core and Capital Group
The main advantage of trading using opposite Vident Core and Capital Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vident Core position performs unexpectedly, Capital Group 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 Capital Group will offset losses from the drop in Capital Group's long position.| Vident Core vs. Vident Core Equity | Vident Core vs. Vident International Equity | Vident Core vs. Invesco Variable Rate | Vident Core vs. FlexShares Credit Scored Corporate |
| Capital Group vs. Capital Group Dividend | Capital Group vs. Capital Group Core | Capital Group vs. Capital Group Growth | Capital Group vs. Capital Group Global |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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