Correlation Between Vanguard Consumer and Global X
Can any of the company-specific risk be diversified away by investing in both Vanguard Consumer and Global X 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 Consumer and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Consumer Staples and Global X Disruptive, you can compare the effects of market volatilities on Vanguard Consumer and Global X 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 Consumer with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Consumer and Global X.
Diversification Opportunities for Vanguard Consumer and Global X
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and Global is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Consumer Staples and Global X Disruptive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Disruptive and Vanguard Consumer 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 Consumer Staples are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Disruptive has no effect on the direction of Vanguard Consumer i.e., Vanguard Consumer and Global X go up and down completely randomly.
Pair Corralation between Vanguard Consumer and Global X
Considering the 90-day investment horizon Vanguard Consumer Staples is expected to generate 0.34 times more return on investment than Global X. However, Vanguard Consumer Staples is 2.92 times less risky than Global X. It trades about 0.06 of its potential returns per unit of risk. Global X Disruptive is currently generating about -0.02 per unit of risk. If you would invest 18,705 in Vanguard Consumer Staples on September 4, 2024 and sell it today you would earn a total of 3,567 from holding Vanguard Consumer Staples or generate 19.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Consumer Staples vs. Global X Disruptive
Performance |
| Timeline |
| Vanguard Consumer Staples |
| Global X Disruptive |
Vanguard Consumer and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Consumer and Global X
The main advantage of trading using opposite Vanguard Consumer and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Consumer position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Vanguard Consumer vs. Vanguard Consumer Discretionary | Vanguard Consumer vs. Vanguard Utilities Index | Vanguard Consumer vs. Vanguard Industrials Index | Vanguard Consumer vs. Vanguard Materials Index |
| Global X vs. Vanguard Industrials Index | Global X vs. Vanguard Communication Services | Global X vs. Vanguard Consumer Discretionary | Global X vs. Vanguard Consumer Staples |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Commodity Directory Find actively traded commodities issued by global exchanges |