Correlation Between Vanguard 500 and Standpoint Multi-asset
Can any of the company-specific risk be diversified away by investing in both Vanguard 500 and Standpoint Multi-asset 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 Standpoint Multi-asset 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 Standpoint Multi Asset, you can compare the effects of market volatilities on Vanguard 500 and Standpoint Multi-asset 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 Standpoint Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard 500 and Standpoint Multi-asset.
Diversification Opportunities for Vanguard 500 and Standpoint Multi-asset
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and Standpoint is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard 500 Index and Standpoint Multi Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standpoint Multi Asset 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 Standpoint Multi-asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standpoint Multi Asset has no effect on the direction of Vanguard 500 i.e., Vanguard 500 and Standpoint Multi-asset go up and down completely randomly.
Pair Corralation between Vanguard 500 and Standpoint Multi-asset
Assuming the 90 days horizon Vanguard 500 Index is expected to generate 1.39 times more return on investment than Standpoint Multi-asset. However, Vanguard 500 is 1.39 times more volatile than Standpoint Multi Asset. It trades about 0.37 of its potential returns per unit of risk. Standpoint Multi Asset is currently generating about 0.24 per unit of risk. If you would invest 52,693 in Vanguard 500 Index on September 1, 2024 and sell it today you would earn a total of 3,086 from holding Vanguard 500 Index or generate 5.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard 500 Index vs. Standpoint Multi Asset
Performance |
| Timeline |
| Vanguard 500 Index |
| Standpoint Multi Asset |
Vanguard 500 and Standpoint Multi-asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard 500 and Standpoint Multi-asset
The main advantage of trading using opposite Vanguard 500 and Standpoint Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard 500 position performs unexpectedly, Standpoint Multi-asset 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 Standpoint Multi-asset will offset losses from the drop in Standpoint Multi-asset's long position.| Vanguard 500 vs. Vanguard Total Bond | Vanguard 500 vs. Vanguard Small Cap Index | Vanguard 500 vs. Vanguard Mid Cap Index | Vanguard 500 vs. Vanguard Extended Market |
| Standpoint Multi-asset vs. Rbc Short Duration | Standpoint Multi-asset vs. Siit Ultra Short | Standpoint Multi-asset vs. Jhancock Short Duration | Standpoint Multi-asset vs. Astor Longshort Fund |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |