Correlation Between Vanguard Health and Pax Esg
Can any of the company-specific risk be diversified away by investing in both Vanguard Health and Pax Esg 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 Pax Esg 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 Pax Esg Beta, you can compare the effects of market volatilities on Vanguard Health and Pax Esg 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 Pax Esg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Health and Pax Esg.
Diversification Opportunities for Vanguard Health and Pax Esg
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Pax is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Health Care and Pax Esg Beta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pax Esg Beta 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 Pax Esg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pax Esg Beta has no effect on the direction of Vanguard Health i.e., Vanguard Health and Pax Esg go up and down completely randomly.
Pair Corralation between Vanguard Health and Pax Esg
Assuming the 90 days horizon Vanguard Health Care is expected to under-perform the Pax Esg. In addition to that, Vanguard Health is 1.87 times more volatile than Pax Esg Beta. It trades about -0.12 of its total potential returns per unit of risk. Pax Esg Beta is currently generating about -0.07 per unit of volatility. If you would invest 944.00 in Pax Esg Beta on September 13, 2024 and sell it today you would lose (7.00) from holding Pax Esg Beta or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Health Care vs. Pax Esg Beta
Performance |
| Timeline |
| Vanguard Health Care |
| Pax Esg Beta |
Vanguard Health and Pax Esg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Health and Pax Esg
The main advantage of trading using opposite Vanguard Health and Pax Esg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Health position performs unexpectedly, Pax Esg 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 Pax Esg will offset losses from the drop in Pax Esg'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 |
| Pax Esg vs. Pax E Bond | Pax Esg vs. Pax Global Environmental | Pax Esg vs. Pax Global Opportunities | Pax Esg vs. Pax High Yield |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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