Correlation Between Vanguard Short and Aptus Defined
Can any of the company-specific risk be diversified away by investing in both Vanguard Short and Aptus Defined 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 Short and Aptus Defined into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Short Term Treasury and Aptus Defined Risk, you can compare the effects of market volatilities on Vanguard Short and Aptus Defined 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 Short with a short position of Aptus Defined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Short and Aptus Defined.
Diversification Opportunities for Vanguard Short and Aptus Defined
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Aptus is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Short Term Treasury and Aptus Defined Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptus Defined Risk and Vanguard Short 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 Short Term Treasury are associated (or correlated) with Aptus Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptus Defined Risk has no effect on the direction of Vanguard Short i.e., Vanguard Short and Aptus Defined go up and down completely randomly.
Pair Corralation between Vanguard Short and Aptus Defined
Given the investment horizon of 90 days Vanguard Short is expected to generate 3.47 times less return on investment than Aptus Defined. But when comparing it to its historical volatility, Vanguard Short Term Treasury is 4.97 times less risky than Aptus Defined. It trades about 0.18 of its potential returns per unit of risk. Aptus Defined Risk is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,754 in Aptus Defined Risk on September 2, 2024 and sell it today you would earn a total of 34.00 from holding Aptus Defined Risk or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Short Term Treasury vs. Aptus Defined Risk
Performance |
| Timeline |
| Vanguard Short Term |
| Aptus Defined Risk |
Vanguard Short and Aptus Defined Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Short and Aptus Defined
The main advantage of trading using opposite Vanguard Short and Aptus Defined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Short position performs unexpectedly, Aptus Defined 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 Aptus Defined will offset losses from the drop in Aptus Defined's long position.| Vanguard Short vs. SPDR Barclays Long | Vanguard Short vs. SPDR Portfolio Intermediate | Vanguard Short vs. SPDR Barclays Short | Vanguard Short vs. SPDR Barclays Intermediate |
| Aptus Defined vs. Amplify BlackSwan Growth | Aptus Defined vs. Aptus Collared Income | Aptus Defined vs. Aptus Drawdown Managed | Aptus Defined vs. Cambria Tail Risk |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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