Correlation Between Vanguard Mid and Hoya Capital
Can any of the company-specific risk be diversified away by investing in both Vanguard Mid and Hoya 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 Mid and Hoya Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Mid Cap Value and The Hoya Capital, you can compare the effects of market volatilities on Vanguard Mid and Hoya 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 Mid with a short position of Hoya Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Mid and Hoya Capital.
Diversification Opportunities for Vanguard Mid and Hoya Capital
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Hoya is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Mid Cap Value and The Hoya Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoya Capital and Vanguard Mid 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 Mid Cap Value are associated (or correlated) with Hoya Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoya Capital has no effect on the direction of Vanguard Mid i.e., Vanguard Mid and Hoya Capital go up and down completely randomly.
Pair Corralation between Vanguard Mid and Hoya Capital
Considering the 90-day investment horizon Vanguard Mid is expected to generate 2.45 times less return on investment than Hoya Capital. But when comparing it to its historical volatility, Vanguard Mid Cap Value is 1.52 times less risky than Hoya Capital. It trades about 0.14 of its potential returns per unit of risk. The Hoya Capital is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 4,451 in The Hoya Capital on November 9, 2024 and sell it today you would earn a total of 250.00 from holding The Hoya Capital or generate 5.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Vanguard Mid Cap Value vs. The Hoya Capital
Performance |
Timeline |
Vanguard Mid Cap |
Hoya Capital |
Vanguard Mid and Hoya Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vanguard Mid and Hoya Capital
The main advantage of trading using opposite Vanguard Mid and Hoya Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Mid position performs unexpectedly, Hoya 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 Hoya Capital will offset losses from the drop in Hoya Capital's long position.Vanguard Mid vs. Vanguard Small Cap Value | Vanguard Mid vs. Vanguard Mid Cap Growth | Vanguard Mid vs. Vanguard Value Index | Vanguard Mid vs. Vanguard Small Cap Growth |
Hoya Capital vs. Hoya Capital High | Hoya Capital vs. Pacer Benchmark Industrial | Hoya Capital vs. Pacer Benchmark Data | Hoya Capital vs. Invesco Dynamic Building |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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