Correlation Between Vanguard Total and Vanguard Core
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Vanguard Core 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 Total and Vanguard Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Bond and Vanguard E Bond, you can compare the effects of market volatilities on Vanguard Total and Vanguard Core 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 Total with a short position of Vanguard Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Vanguard Core.
Diversification Opportunities for Vanguard Total and Vanguard Core
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Vanguard is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Bond and Vanguard E Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard E Bond and Vanguard Total 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 Total Bond are associated (or correlated) with Vanguard Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard E Bond has no effect on the direction of Vanguard Total i.e., Vanguard Total and Vanguard Core go up and down completely randomly.
Pair Corralation between Vanguard Total and Vanguard Core
Assuming the 90 days horizon Vanguard Total is expected to generate 1.07 times less return on investment than Vanguard Core. But when comparing it to its historical volatility, Vanguard Total Bond is 1.03 times less risky than Vanguard Core. It trades about 0.05 of its potential returns per unit of risk. Vanguard E Bond is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 899.00 in Vanguard E Bond on August 30, 2024 and sell it today you would earn a total of 4.00 from holding Vanguard E Bond or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total Bond vs. Vanguard E Bond
Performance |
| Timeline |
| Vanguard Total Bond |
| Vanguard E Bond |
Vanguard Total and Vanguard Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Vanguard Core
The main advantage of trading using opposite Vanguard Total and Vanguard Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Vanguard Core 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 Core will offset losses from the drop in Vanguard Core's long position.| Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Total Stock | Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard 500 Index |
| Vanguard Core vs. Vanguard Total Bond | Vanguard Core vs. Vanguard Total Bond | Vanguard Core vs. Vanguard Total Bond | Vanguard Core vs. Bond Fund Of |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |