Correlation Between Vanguard Extended and Amg Southernsun
Can any of the company-specific risk be diversified away by investing in both Vanguard Extended and Amg Southernsun 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 Amg Southernsun 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 Amg Southernsun Equity, you can compare the effects of market volatilities on Vanguard Extended and Amg Southernsun 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 Amg Southernsun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Extended and Amg Southernsun.
Diversification Opportunities for Vanguard Extended and Amg Southernsun
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Amg is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Extended Market and Amg Southernsun Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Southernsun Equity 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 Amg Southernsun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Southernsun Equity has no effect on the direction of Vanguard Extended i.e., Vanguard Extended and Amg Southernsun go up and down completely randomly.
Pair Corralation between Vanguard Extended and Amg Southernsun
Assuming the 90 days horizon Vanguard Extended Market is expected to generate 1.02 times more return on investment than Amg Southernsun. However, Vanguard Extended is 1.02 times more volatile than Amg Southernsun Equity. It trades about 0.14 of its potential returns per unit of risk. Amg Southernsun Equity is currently generating about 0.05 per unit of risk. If you would invest 12,719 in Vanguard Extended Market on September 1, 2024 and sell it today you would earn a total of 2,786 from holding Vanguard Extended Market or generate 21.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Vanguard Extended Market vs. Amg Southernsun Equity
Performance |
| Timeline |
| Vanguard Extended Market |
| Amg Southernsun Equity |
Vanguard Extended and Amg Southernsun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Extended and Amg Southernsun
The main advantage of trading using opposite Vanguard Extended and Amg Southernsun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Extended position performs unexpectedly, Amg Southernsun 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 Amg Southernsun will offset losses from the drop in Amg Southernsun's long position.| Vanguard Extended vs. Vanguard Small Cap Index | Vanguard Extended vs. Vanguard Institutional Index | Vanguard Extended vs. Vanguard Total Bond | Vanguard Extended vs. Vanguard Total International |
| Amg Southernsun vs. Commonwealth Global Fund | Amg Southernsun vs. Nasdaq 100 Index Fund | Amg Southernsun vs. Semiconductor Ultrasector Profund | Amg Southernsun vs. Small Cap Stock |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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