Correlation Between Vanguard Extended and Acclivity Mid
Can any of the company-specific risk be diversified away by investing in both Vanguard Extended and Acclivity Mid 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 Extended and Acclivity Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Extended Market and Acclivity Mid Cap, you can compare the effects of market volatilities on Vanguard Extended and Acclivity Mid 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 Extended with a short position of Acclivity Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Extended and Acclivity Mid.
Diversification Opportunities for Vanguard Extended and Acclivity Mid
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Acclivity is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Extended Market and Acclivity Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acclivity Mid Cap and Vanguard Extended 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 Extended Market are associated (or correlated) with Acclivity Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acclivity Mid Cap has no effect on the direction of Vanguard Extended i.e., Vanguard Extended and Acclivity Mid go up and down completely randomly.
Pair Corralation between Vanguard Extended and Acclivity Mid
Assuming the 90 days horizon Vanguard Extended Market is expected to generate 1.39 times more return on investment than Acclivity Mid. However, Vanguard Extended is 1.39 times more volatile than Acclivity Mid Cap. It trades about 0.4 of its potential returns per unit of risk. Acclivity Mid Cap is currently generating about 0.36 per unit of risk. If you would invest 13,960 in Vanguard Extended Market on September 3, 2024 and sell it today you would earn a total of 1,587 from holding Vanguard Extended Market or generate 11.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Extended Market vs. Acclivity Mid Cap
Performance |
| Timeline |
| Vanguard Extended Market |
| Acclivity Mid Cap |
Vanguard Extended and Acclivity Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Extended and Acclivity Mid
The main advantage of trading using opposite Vanguard Extended and Acclivity Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Extended position performs unexpectedly, Acclivity Mid 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 Acclivity Mid will offset losses from the drop in Acclivity Mid's long position.| Vanguard Extended vs. Vanguard Total International | Vanguard Extended vs. Vanguard Total Bond | Vanguard Extended vs. Vanguard Value Index | Vanguard Extended vs. Vanguard Growth Index |
| Acclivity Mid vs. Qs Small Capitalization | Acclivity Mid vs. Us Small Cap | Acclivity Mid vs. Fisher Small Cap | Acclivity Mid vs. Ab Small Cap |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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