Correlation Between Vanguard Growth and Guardian Fundamental
Can any of the company-specific risk be diversified away by investing in both Vanguard Growth and Guardian Fundamental 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 Growth and Guardian Fundamental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Growth Index and Guardian Fundamental Global, you can compare the effects of market volatilities on Vanguard Growth and Guardian Fundamental 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 Growth with a short position of Guardian Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Growth and Guardian Fundamental.
Diversification Opportunities for Vanguard Growth and Guardian Fundamental
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Guardian is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Growth Index and Guardian Fundamental Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Fundamental and Vanguard Growth 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 Growth Index are associated (or correlated) with Guardian Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Fundamental has no effect on the direction of Vanguard Growth i.e., Vanguard Growth and Guardian Fundamental go up and down completely randomly.
Pair Corralation between Vanguard Growth and Guardian Fundamental
Assuming the 90 days horizon Vanguard Growth Index is expected to generate 1.6 times more return on investment than Guardian Fundamental. However, Vanguard Growth is 1.6 times more volatile than Guardian Fundamental Global. It trades about 0.12 of its potential returns per unit of risk. Guardian Fundamental Global is currently generating about 0.07 per unit of risk. If you would invest 11,551 in Vanguard Growth Index on September 1, 2024 and sell it today you would earn a total of 9,500 from holding Vanguard Growth Index or generate 82.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Vanguard Growth Index vs. Guardian Fundamental Global
Performance |
| Timeline |
| Vanguard Growth Index |
| Guardian Fundamental |
Vanguard Growth and Guardian Fundamental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Growth and Guardian Fundamental
The main advantage of trading using opposite Vanguard Growth and Guardian Fundamental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Growth position performs unexpectedly, Guardian Fundamental 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 Guardian Fundamental will offset losses from the drop in Guardian Fundamental's long position.| Vanguard Growth vs. Vanguard Value Index | Vanguard Growth vs. Vanguard Mid Cap Index | Vanguard Growth vs. Vanguard Small Cap Growth | Vanguard Growth vs. Vanguard 500 Index |
| Guardian Fundamental vs. Guardian Dividend Growth | Guardian Fundamental vs. Equity Growth Fund | Guardian Fundamental vs. Putnam High Income | Guardian Fundamental vs. Fidelity Advisor Technology |
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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