Correlation Between Vanguard Inflation-protec and Inflation-adjusted
Can any of the company-specific risk be diversified away by investing in both Vanguard Inflation-protec and Inflation-adjusted 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 Inflation-protec and Inflation-adjusted into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Inflation Protected Securities and Inflation Adjusted Bond Fund, you can compare the effects of market volatilities on Vanguard Inflation-protec and Inflation-adjusted 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 Inflation-protec with a short position of Inflation-adjusted. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Inflation-protec and Inflation-adjusted.
Diversification Opportunities for Vanguard Inflation-protec and Inflation-adjusted
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Inflation-adjusted is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Inflation Protected S and Inflation Adjusted Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflation Adjusted Bond and Vanguard Inflation-protec 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 Inflation Protected Securities are associated (or correlated) with Inflation-adjusted. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflation Adjusted Bond has no effect on the direction of Vanguard Inflation-protec i.e., Vanguard Inflation-protec and Inflation-adjusted go up and down completely randomly.
Pair Corralation between Vanguard Inflation-protec and Inflation-adjusted
Assuming the 90 days horizon Vanguard Inflation Protected Securities is expected to generate 1.08 times more return on investment than Inflation-adjusted. However, Vanguard Inflation-protec is 1.08 times more volatile than Inflation Adjusted Bond Fund. It trades about 0.24 of its potential returns per unit of risk. Inflation Adjusted Bond Fund is currently generating about 0.25 per unit of risk. If you would invest 928.00 in Vanguard Inflation Protected Securities on November 27, 2024 and sell it today you would earn a total of 11.00 from holding Vanguard Inflation Protected Securities or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Inflation Protected S vs. Inflation Adjusted Bond Fund
Performance |
| Timeline |
| Vanguard Inflation-protec |
| Inflation Adjusted Bond |
Vanguard Inflation-protec and Inflation-adjusted Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Inflation-protec and Inflation-adjusted
The main advantage of trading using opposite Vanguard Inflation-protec and Inflation-adjusted positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Inflation-protec position performs unexpectedly, Inflation-adjusted 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 Inflation-adjusted will offset losses from the drop in Inflation-adjusted's long position.| Vanguard Inflation-protec vs. Rbc Global Equity | Vanguard Inflation-protec vs. Morningstar Global Income | Vanguard Inflation-protec vs. Ms Global Fixed | Vanguard Inflation-protec vs. Aqr Global Macro |
| Inflation-adjusted vs. Massmutual Premier Diversified | Inflation-adjusted vs. Diversified Real Asset | Inflation-adjusted vs. Principal Lifetime Hybrid | Inflation-adjusted vs. Western Asset Diversified |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |