Correlation Between Vanguard and Picton Mahoney
Can any of the company-specific risk be diversified away by investing in both Vanguard and Picton Mahoney 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 and Picton Mahoney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard SP 500 and Picton Mahoney Fortified, you can compare the effects of market volatilities on Vanguard and Picton Mahoney 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 with a short position of Picton Mahoney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard and Picton Mahoney.
Diversification Opportunities for Vanguard and Picton Mahoney
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Picton is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard SP 500 and Picton Mahoney Fortified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Picton Mahoney Fortified and Vanguard 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 SP 500 are associated (or correlated) with Picton Mahoney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Picton Mahoney Fortified has no effect on the direction of Vanguard i.e., Vanguard and Picton Mahoney go up and down completely randomly.
Pair Corralation between Vanguard and Picton Mahoney
Assuming the 90 days trading horizon Vanguard is expected to generate 1.06 times less return on investment than Picton Mahoney. But when comparing it to its historical volatility, Vanguard SP 500 is 1.24 times less risky than Picton Mahoney. It trades about 0.35 of its potential returns per unit of risk. Picton Mahoney Fortified is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1,995 in Picton Mahoney Fortified on September 1, 2024 and sell it today you would earn a total of 148.00 from holding Picton Mahoney Fortified or generate 7.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Vanguard SP 500 vs. Picton Mahoney Fortified
Performance |
| Timeline |
| Vanguard SP 500 |
| Picton Mahoney Fortified |
Vanguard and Picton Mahoney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard and Picton Mahoney
The main advantage of trading using opposite Vanguard and Picton Mahoney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard position performs unexpectedly, Picton Mahoney 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 Picton Mahoney will offset losses from the drop in Picton Mahoney's long position.| Vanguard vs. Vanguard FTSE Canadian | Vanguard vs. Vanguard Growth Portfolio | Vanguard vs. Vanguard SP 500 | Vanguard vs. Vanguard FTSE Canada |
| Picton Mahoney vs. Brompton Global Dividend | Picton Mahoney vs. Global Healthcare Income | Picton Mahoney vs. Tech Leaders Income | Picton Mahoney vs. Brompton North American |
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
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| 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 | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |