Correlation Between Vanguard Minimum and ETRACS 2x
Can any of the company-specific risk be diversified away by investing in both Vanguard Minimum and ETRACS 2x 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 Minimum and ETRACS 2x into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Minimum Volatility and ETRACS 2x Leveraged, you can compare the effects of market volatilities on Vanguard Minimum and ETRACS 2x 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 Minimum with a short position of ETRACS 2x. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Minimum and ETRACS 2x.
Diversification Opportunities for Vanguard Minimum and ETRACS 2x
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and ETRACS is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Minimum Volatility and ETRACS 2x Leveraged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETRACS 2x Leveraged and Vanguard Minimum 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 Minimum Volatility are associated (or correlated) with ETRACS 2x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETRACS 2x Leveraged has no effect on the direction of Vanguard Minimum i.e., Vanguard Minimum and ETRACS 2x go up and down completely randomly.
Pair Corralation between Vanguard Minimum and ETRACS 2x
Given the investment horizon of 90 days Vanguard Minimum is expected to generate 1.47 times less return on investment than ETRACS 2x. But when comparing it to its historical volatility, Vanguard Minimum Volatility is 1.88 times less risky than ETRACS 2x. It trades about 0.09 of its potential returns per unit of risk. ETRACS 2x Leveraged is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,956 in ETRACS 2x Leveraged on September 3, 2024 and sell it today you would earn a total of 1,396 from holding ETRACS 2x Leveraged or generate 47.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Minimum Volatility vs. ETRACS 2x Leveraged
Performance |
| Timeline |
| Vanguard Minimum Vol |
| ETRACS 2x Leveraged |
Vanguard Minimum and ETRACS 2x Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Minimum and ETRACS 2x
The main advantage of trading using opposite Vanguard Minimum and ETRACS 2x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Minimum position performs unexpectedly, ETRACS 2x 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 ETRACS 2x will offset losses from the drop in ETRACS 2x's long position.| Vanguard Minimum vs. Vanguard Quality Factor | Vanguard Minimum vs. Vanguard Momentum Factor | Vanguard Minimum vs. Vanguard Multifactor | Vanguard Minimum vs. Vanguard Value Factor |
| ETRACS 2x vs. First Trust Dorsey | ETRACS 2x vs. Direxion Daily MSCI | ETRACS 2x vs. MFUT | ETRACS 2x vs. VanEck Morningstar Wide |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |