Correlation Between Vanguard International and Vanguard ESG
Can any of the company-specific risk be diversified away by investing in both Vanguard International and Vanguard ESG 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 International and Vanguard ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard International Dividend and Vanguard ESG Stock, you can compare the effects of market volatilities on Vanguard International and Vanguard ESG 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 International with a short position of Vanguard ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard International and Vanguard ESG.
Diversification Opportunities for Vanguard International and Vanguard ESG
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vanguard and Vanguard is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard International Dividen and Vanguard ESG Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard ESG Stock and Vanguard International 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 International Dividend are associated (or correlated) with Vanguard ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard ESG Stock has no effect on the direction of Vanguard International i.e., Vanguard International and Vanguard ESG go up and down completely randomly.
Pair Corralation between Vanguard International and Vanguard ESG
Given the investment horizon of 90 days Vanguard International is expected to generate 2.66 times less return on investment than Vanguard ESG. But when comparing it to its historical volatility, Vanguard International Dividend is 1.22 times less risky than Vanguard ESG. It trades about 0.06 of its potential returns per unit of risk. Vanguard ESG Stock is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 6,541 in Vanguard ESG Stock on August 28, 2024 and sell it today you would earn a total of 4,132 from holding Vanguard ESG Stock or generate 63.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard International Dividen vs. Vanguard ESG Stock
Performance |
| Timeline |
| Vanguard International |
| Vanguard ESG Stock |
Vanguard International and Vanguard ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard International and Vanguard ESG
The main advantage of trading using opposite Vanguard International and Vanguard ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard International position performs unexpectedly, Vanguard ESG 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 Vanguard ESG will offset losses from the drop in Vanguard ESG's long position.| Vanguard International vs. iShares MSCI Intl | Vanguard International vs. iShares Edge MSCI | Vanguard International vs. iShares MSCI Emerging | Vanguard International vs. iShares MSCI Intl |
| Vanguard ESG vs. Vanguard ESG International | Vanguard ESG vs. iShares ESG Aware | Vanguard ESG vs. iShares MSCI USA | Vanguard ESG vs. iShares ESG Aware |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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