Correlation Between Vanguard Consumer and Mast Global
Can any of the company-specific risk be diversified away by investing in both Vanguard Consumer and Mast Global 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 Mast Global 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 Mast Global Battery, you can compare the effects of market volatilities on Vanguard Consumer and Mast Global 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 Mast Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Consumer and Mast Global.
Diversification Opportunities for Vanguard Consumer and Mast Global
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and Mast is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Consumer Staples and Mast Global Battery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mast Global Battery 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 Mast Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mast Global Battery has no effect on the direction of Vanguard Consumer i.e., Vanguard Consumer and Mast Global go up and down completely randomly.
Pair Corralation between Vanguard Consumer and Mast Global
Considering the 90-day investment horizon Vanguard Consumer Staples is expected to generate 0.38 times more return on investment than Mast Global. However, Vanguard Consumer Staples is 2.63 times less risky than Mast Global. It trades about 0.13 of its potential returns per unit of risk. Mast Global Battery is currently generating about 0.04 per unit of risk. If you would invest 20,333 in Vanguard Consumer Staples on September 5, 2024 and sell it today you would earn a total of 1,939 from holding Vanguard Consumer Staples or generate 9.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Consumer Staples vs. Mast Global Battery
Performance |
| Timeline |
| Vanguard Consumer Staples |
| Mast Global Battery |
Vanguard Consumer and Mast Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Consumer and Mast Global
The main advantage of trading using opposite Vanguard Consumer and Mast Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Consumer position performs unexpectedly, Mast Global 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 Mast Global will offset losses from the drop in Mast Global's long position.| Vanguard Consumer vs. Global X AgTech | Vanguard Consumer vs. VanEck Vectors ETF | Vanguard Consumer vs. US Vegan Climate |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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