Correlation Between Vanguard Mid and DBX ETF
Can any of the company-specific risk be diversified away by investing in both Vanguard Mid and DBX ETF 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 DBX ETF 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 DBX ETF Trust, you can compare the effects of market volatilities on Vanguard Mid and DBX ETF 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 DBX ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Mid and DBX ETF.
Diversification Opportunities for Vanguard Mid and DBX ETF
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vanguard and DBX is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Mid Cap Value and DBX ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBX ETF Trust 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 DBX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBX ETF Trust has no effect on the direction of Vanguard Mid i.e., Vanguard Mid and DBX ETF go up and down completely randomly.
Pair Corralation between Vanguard Mid and DBX ETF
Considering the 90-day investment horizon Vanguard Mid Cap Value is expected to generate 1.09 times more return on investment than DBX ETF. However, Vanguard Mid is 1.09 times more volatile than DBX ETF Trust. It trades about 0.11 of its potential returns per unit of risk. DBX ETF Trust is currently generating about 0.07 per unit of risk. If you would invest 13,023 in Vanguard Mid Cap Value on September 4, 2024 and sell it today you would earn a total of 4,468 from holding Vanguard Mid Cap Value or generate 34.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Mid Cap Value vs. DBX ETF Trust
Performance |
| Timeline |
| Vanguard Mid Cap |
| DBX ETF Trust |
Vanguard Mid and DBX ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Mid and DBX ETF
The main advantage of trading using opposite Vanguard Mid and DBX ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Mid position performs unexpectedly, DBX ETF 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 DBX ETF will offset losses from the drop in DBX ETF's long position.| Vanguard Mid vs. SPDR SP Dividend | Vanguard Mid vs. SCOR PK | Vanguard Mid vs. HUMANA INC | Vanguard Mid vs. Aquagold International |
| DBX ETF vs. Vanguard Mid Cap Value | DBX ETF vs. SPDR SP Dividend | DBX ETF vs. SCOR PK | DBX ETF vs. HUMANA INC |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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