Correlation Between Vanguard 500 and Champlain Mid
Can any of the company-specific risk be diversified away by investing in both Vanguard 500 and Champlain 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 500 and Champlain Mid 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 Champlain Mid Cap, you can compare the effects of market volatilities on Vanguard 500 and Champlain 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 500 with a short position of Champlain Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard 500 and Champlain Mid.
Diversification Opportunities for Vanguard 500 and Champlain Mid
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vanguard and Champlain is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard 500 Index and Champlain Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champlain Mid Cap 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 Champlain Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champlain Mid Cap has no effect on the direction of Vanguard 500 i.e., Vanguard 500 and Champlain Mid go up and down completely randomly.
Pair Corralation between Vanguard 500 and Champlain Mid
Assuming the 90 days horizon Vanguard 500 Index is expected to generate 0.87 times more return on investment than Champlain Mid. However, Vanguard 500 Index is 1.15 times less risky than Champlain Mid. It trades about 0.12 of its potential returns per unit of risk. Champlain Mid Cap is currently generating about 0.06 per unit of risk. If you would invest 40,367 in Vanguard 500 Index on August 28, 2024 and sell it today you would earn a total of 14,818 from holding Vanguard 500 Index or generate 36.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Vanguard 500 Index vs. Champlain Mid Cap
Performance |
| Timeline |
| Vanguard 500 Index |
| Champlain Mid Cap |
Vanguard 500 and Champlain Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard 500 and Champlain Mid
The main advantage of trading using opposite Vanguard 500 and Champlain Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard 500 position performs unexpectedly, Champlain 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 Champlain Mid will offset losses from the drop in Champlain Mid's 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 |
| Champlain Mid vs. Champlain Small Pany | Champlain Mid vs. T Rowe Price | Champlain Mid vs. American Mutual Fund | Champlain Mid vs. Loomis Sayles 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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