Correlation Between Vanguard Explorer and Growth Income
Can any of the company-specific risk be diversified away by investing in both Vanguard Explorer and Growth Income 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 Explorer and Growth Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Explorer Value and Growth Income Fund, you can compare the effects of market volatilities on Vanguard Explorer and Growth Income 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 Explorer with a short position of Growth Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Explorer and Growth Income.
Diversification Opportunities for Vanguard Explorer and Growth Income
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Growth is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Explorer Value and Growth Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Income and Vanguard Explorer 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 Explorer Value are associated (or correlated) with Growth Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Income has no effect on the direction of Vanguard Explorer i.e., Vanguard Explorer and Growth Income go up and down completely randomly.
Pair Corralation between Vanguard Explorer and Growth Income
Assuming the 90 days horizon Vanguard Explorer Value is expected to generate 1.73 times more return on investment than Growth Income. However, Vanguard Explorer is 1.73 times more volatile than Growth Income Fund. It trades about 0.23 of its potential returns per unit of risk. Growth Income Fund is currently generating about 0.19 per unit of risk. If you would invest 4,901 in Vanguard Explorer Value on August 27, 2024 and sell it today you would earn a total of 372.00 from holding Vanguard Explorer Value or generate 7.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Explorer Value vs. Growth Income Fund
Performance |
| Timeline |
| Vanguard Explorer Value |
| Growth Income |
Vanguard Explorer and Growth Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Explorer and Growth Income
The main advantage of trading using opposite Vanguard Explorer and Growth Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Explorer position performs unexpectedly, Growth Income 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 Growth Income will offset losses from the drop in Growth Income's long position.| Vanguard Explorer vs. Vanguard Strategic Small Cap | Vanguard Explorer vs. Vanguard Emerging Markets | Vanguard Explorer vs. Vanguard Diversified Equity | Vanguard Explorer vs. Vanguard Mid Cap |
| Growth Income vs. Mid Cap Index | Growth Income vs. Mid Cap Strategic | Growth Income vs. Valic Company I | Growth Income vs. Small Cap Special |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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