Correlation Between Vanguard Dividend and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both Vanguard Dividend and SPDR Portfolio 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 Dividend and SPDR Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Dividend Appreciation and SPDR Portfolio SP, you can compare the effects of market volatilities on Vanguard Dividend and SPDR Portfolio 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 Dividend with a short position of SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Dividend and SPDR Portfolio.
Diversification Opportunities for Vanguard Dividend and SPDR Portfolio
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and SPDR is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Dividend Appreciation and SPDR Portfolio SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio SP and Vanguard Dividend 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 Dividend Appreciation are associated (or correlated) with SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio SP has no effect on the direction of Vanguard Dividend i.e., Vanguard Dividend and SPDR Portfolio go up and down completely randomly.
Pair Corralation between Vanguard Dividend and SPDR Portfolio
Considering the 90-day investment horizon Vanguard Dividend is expected to generate 1.43 times less return on investment than SPDR Portfolio. But when comparing it to its historical volatility, Vanguard Dividend Appreciation is 1.2 times less risky than SPDR Portfolio. It trades about 0.09 of its potential returns per unit of risk. SPDR Portfolio SP is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4,779 in SPDR Portfolio SP on September 2, 2024 and sell it today you would earn a total of 2,596 from holding SPDR Portfolio SP or generate 54.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Dividend Appreciation vs. SPDR Portfolio SP
Performance |
| Timeline |
| Vanguard Dividend |
| SPDR Portfolio SP |
Vanguard Dividend and SPDR Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Dividend and SPDR Portfolio
The main advantage of trading using opposite Vanguard Dividend and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Dividend position performs unexpectedly, SPDR Portfolio 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 SPDR Portfolio will offset losses from the drop in SPDR Portfolio's long position.| Vanguard Dividend vs. Vanguard High Dividend | Vanguard Dividend vs. Vanguard Real Estate | Vanguard Dividend vs. Schwab Dividend Equity | Vanguard Dividend vs. Vanguard Growth Index |
| SPDR Portfolio vs. SPDR Portfolio Emerging | SPDR Portfolio vs. SPDR SP World | SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. SPDR Russell Small |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| CEOs Directory Screen CEOs from public companies around the world |