Correlation Between Vanguard Health and Scharf Global
Can any of the company-specific risk be diversified away by investing in both Vanguard Health and Scharf Global 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 Scharf Global 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 Scharf Global Opportunity, you can compare the effects of market volatilities on Vanguard Health and Scharf Global 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 Scharf Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Health and Scharf Global.
Diversification Opportunities for Vanguard Health and Scharf Global
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and Scharf is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Health Care and Scharf Global Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scharf Global Opportunity 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 Scharf Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scharf Global Opportunity has no effect on the direction of Vanguard Health i.e., Vanguard Health and Scharf Global go up and down completely randomly.
Pair Corralation between Vanguard Health and Scharf Global
Assuming the 90 days horizon Vanguard Health Care is expected to generate 1.67 times more return on investment than Scharf Global. However, Vanguard Health is 1.67 times more volatile than Scharf Global Opportunity. It trades about 0.11 of its potential returns per unit of risk. Scharf Global Opportunity is currently generating about -0.12 per unit of risk. If you would invest 20,346 in Vanguard Health Care on September 17, 2024 and sell it today you would earn a total of 282.00 from holding Vanguard Health Care or generate 1.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Health Care vs. Scharf Global Opportunity
Performance |
| Timeline |
| Vanguard Health Care |
| Scharf Global Opportunity |
Vanguard Health and Scharf Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Health and Scharf Global
The main advantage of trading using opposite Vanguard Health and Scharf Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Health position performs unexpectedly, Scharf Global 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 Scharf Global will offset losses from the drop in Scharf Global'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 |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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