Correlation Between Vanguard Health and Aam/himco Short
Can any of the company-specific risk be diversified away by investing in both Vanguard Health and Aam/himco Short 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 Health and Aam/himco Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Health Care and Aamhimco Short Duration, you can compare the effects of market volatilities on Vanguard Health and Aam/himco Short 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 Health with a short position of Aam/himco Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Health and Aam/himco Short.
Diversification Opportunities for Vanguard Health and Aam/himco Short
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and Aam/himco is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Health Care and Aamhimco Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aamhimco Short Duration and Vanguard Health 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 Health Care are associated (or correlated) with Aam/himco Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aamhimco Short Duration has no effect on the direction of Vanguard Health i.e., Vanguard Health and Aam/himco Short go up and down completely randomly.
Pair Corralation between Vanguard Health and Aam/himco Short
Assuming the 90 days horizon Vanguard Health Care is expected to under-perform the Aam/himco Short. In addition to that, Vanguard Health is 5.64 times more volatile than Aamhimco Short Duration. It trades about -0.13 of its total potential returns per unit of risk. Aamhimco Short Duration is currently generating about -0.17 per unit of volatility. If you would invest 1,002 in Aamhimco Short Duration on October 14, 2024 and sell it today you would lose (4.00) from holding Aamhimco Short Duration or give up 0.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Health Care vs. Aamhimco Short Duration
Performance |
| Timeline |
| Vanguard Health Care |
| Aamhimco Short Duration |
Vanguard Health and Aam/himco Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Health and Aam/himco Short
The main advantage of trading using opposite Vanguard Health and Aam/himco Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Health position performs unexpectedly, Aam/himco Short 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 Aam/himco Short will offset losses from the drop in Aam/himco Short's long position.| Vanguard Health vs. Vanguard Energy Fund | Vanguard Health vs. Vanguard Dividend Growth | Vanguard Health vs. Vanguard Wellington Fund | Vanguard Health vs. Vanguard Capital Opportunity |
| Aam/himco Short vs. Baillie Gifford Health | Aam/himco Short vs. Vanguard Health Care | Aam/himco Short vs. Baron Health Care | Aam/himco Short vs. Delaware Healthcare 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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