Correlation Between Vanguard 500 and Akre Focus
Can any of the company-specific risk be diversified away by investing in both Vanguard 500 and Akre Focus 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 Akre Focus 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 Akre Focus Fund, you can compare the effects of market volatilities on Vanguard 500 and Akre Focus 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 Akre Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard 500 and Akre Focus.
Diversification Opportunities for Vanguard 500 and Akre Focus
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Akre is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard 500 Index and Akre Focus Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akre Focus Fund 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 Akre Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akre Focus Fund has no effect on the direction of Vanguard 500 i.e., Vanguard 500 and Akre Focus go up and down completely randomly.
Pair Corralation between Vanguard 500 and Akre Focus
Assuming the 90 days horizon Vanguard 500 is expected to generate 1.21 times less return on investment than Akre Focus. In addition to that, Vanguard 500 is 1.04 times more volatile than Akre Focus Fund. It trades about 0.13 of its total potential returns per unit of risk. Akre Focus Fund is currently generating about 0.17 per unit of volatility. If you would invest 7,183 in Akre Focus Fund on August 25, 2024 and sell it today you would earn a total of 219.00 from holding Akre Focus Fund or generate 3.05% 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. Akre Focus Fund
Performance |
| Timeline |
| Vanguard 500 Index |
| Akre Focus Fund |
Vanguard 500 and Akre Focus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard 500 and Akre Focus
The main advantage of trading using opposite Vanguard 500 and Akre Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard 500 position performs unexpectedly, Akre Focus 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 Akre Focus will offset losses from the drop in Akre Focus' long position.| Vanguard 500 vs. Vanguard Total Stock | Vanguard 500 vs. Vanguard Total Bond | Vanguard 500 vs. Vanguard Windsor Ii | Vanguard 500 vs. Vanguard Small Cap Index |
| Akre Focus vs. Osterweis Strategic Income | Akre Focus vs. Doubleline Low Duration | Akre Focus vs. Doubleline Total Return | Akre Focus vs. Primecap Odyssey Growth |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |