Correlation Between Vanguard 500 and Virtus High
Can any of the company-specific risk be diversified away by investing in both Vanguard 500 and Virtus High 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 500 and Virtus High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard 500 Index and Virtus High Yield, you can compare the effects of market volatilities on Vanguard 500 and Virtus High 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 500 with a short position of Virtus High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard 500 and Virtus High.
Diversification Opportunities for Vanguard 500 and Virtus High
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Virtus is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard 500 Index and Virtus High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus High Yield and Vanguard 500 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 500 Index are associated (or correlated) with Virtus High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus High Yield has no effect on the direction of Vanguard 500 i.e., Vanguard 500 and Virtus High go up and down completely randomly.
Pair Corralation between Vanguard 500 and Virtus High
Assuming the 90 days horizon Vanguard 500 Index is expected to generate 3.82 times more return on investment than Virtus High. However, Vanguard 500 is 3.82 times more volatile than Virtus High Yield. It trades about 0.11 of its potential returns per unit of risk. Virtus High Yield is currently generating about 0.12 per unit of risk. If you would invest 54,843 in Vanguard 500 Index on November 4, 2024 and sell it today you would earn a total of 942.00 from holding Vanguard 500 Index or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard 500 Index vs. Virtus High Yield
Performance |
| Timeline |
| Vanguard 500 Index |
| Virtus High Yield |
Vanguard 500 and Virtus High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard 500 and Virtus High
The main advantage of trading using opposite Vanguard 500 and Virtus High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard 500 position performs unexpectedly, Virtus High 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 Virtus High will offset losses from the drop in Virtus High's long position.| Vanguard 500 vs. Vanguard Total Stock | Vanguard 500 vs. Vanguard Mid Cap Index | Vanguard 500 vs. Vanguard Small Cap Index | Vanguard 500 vs. Vanguard Total Bond |
| Virtus High vs. Gmo Quality Fund | Virtus High vs. Lord Abbett Diversified | Virtus High vs. Schwab Small Cap Index | Virtus High vs. Madison Diversified Income |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |