Correlation Between Vanguard Growth and Polar Capital
Can any of the company-specific risk be diversified away by investing in both Vanguard Growth and Polar Capital 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 Polar Capital 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 Polar Capital Emerging, you can compare the effects of market volatilities on Vanguard Growth and Polar Capital 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 Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Growth and Polar Capital.
Diversification Opportunities for Vanguard Growth and Polar Capital
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and Polar is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Growth Index and Polar Capital Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Capital Emerging 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 Polar Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polar Capital Emerging has no effect on the direction of Vanguard Growth i.e., Vanguard Growth and Polar Capital go up and down completely randomly.
Pair Corralation between Vanguard Growth and Polar Capital
Assuming the 90 days horizon Vanguard Growth Index is expected to generate 1.12 times more return on investment than Polar Capital. However, Vanguard Growth is 1.12 times more volatile than Polar Capital Emerging. It trades about 0.13 of its potential returns per unit of risk. Polar Capital Emerging is currently generating about -0.09 per unit of risk. If you would invest 19,771 in Vanguard Growth Index on August 30, 2024 and sell it today you would earn a total of 1,114 from holding Vanguard Growth Index or generate 5.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Growth Index vs. Polar Capital Emerging
Performance |
| Timeline |
| Vanguard Growth Index |
| Polar Capital Emerging |
Vanguard Growth and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Growth and Polar Capital
The main advantage of trading using opposite Vanguard Growth and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Growth position performs unexpectedly, Polar Capital 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 Polar Capital will offset losses from the drop in Polar Capital'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 |
| Polar Capital vs. Small Cap Equity | Polar Capital vs. Rbc Ultra Short Fixed | Polar Capital vs. Balanced Fund Retail | Polar Capital vs. Doubleline E Fixed |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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