Correlation Between Vanguard Global and Guardian
Can any of the company-specific risk be diversified away by investing in both Vanguard Global and Guardian 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 Global and Guardian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Global Momentum and Guardian i3 Global, you can compare the effects of market volatilities on Vanguard Global and Guardian 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 Global with a short position of Guardian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Global and Guardian.
Diversification Opportunities for Vanguard Global and Guardian
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Guardian is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Global Momentum and Guardian i3 Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian i3 Global and Vanguard Global 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 Global Momentum are associated (or correlated) with Guardian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian i3 Global has no effect on the direction of Vanguard Global i.e., Vanguard Global and Guardian go up and down completely randomly.
Pair Corralation between Vanguard Global and Guardian
Assuming the 90 days trading horizon Vanguard Global Momentum is expected to generate 0.95 times more return on investment than Guardian. However, Vanguard Global Momentum is 1.06 times less risky than Guardian. It trades about 0.18 of its potential returns per unit of risk. Guardian i3 Global is currently generating about 0.15 per unit of risk. If you would invest 6,266 in Vanguard Global Momentum on September 13, 2024 and sell it today you would earn a total of 413.00 from holding Vanguard Global Momentum or generate 6.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Global Momentum vs. Guardian i3 Global
Performance |
| Timeline |
| Vanguard Global Momentum |
| Guardian i3 Global |
Vanguard Global and Guardian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Global and Guardian
The main advantage of trading using opposite Vanguard Global and Guardian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Global position performs unexpectedly, Guardian 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 will offset losses from the drop in Guardian's long position.| Vanguard Global vs. Guardian i3 Global | Vanguard Global vs. CI Global Real | Vanguard Global vs. CI Enhanced Short | Vanguard Global vs. BMO Aggregate Bond |
| Guardian vs. Guardian i3 Quality | Guardian vs. Guardian Directed Premium | Guardian vs. Guardian Directed Equity | Guardian vs. CI ONE Global |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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