Correlation Between Vanguard Mid and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both Vanguard Mid and SPDR Portfolio 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 SPDR Portfolio 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 SPDR Portfolio SP, you can compare the effects of market volatilities on Vanguard Mid and SPDR Portfolio 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 SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Mid and SPDR Portfolio.
Diversification Opportunities for Vanguard Mid and SPDR Portfolio
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and SPDR is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Mid Cap Value and SPDR Portfolio SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio SP 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 SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio SP has no effect on the direction of Vanguard Mid i.e., Vanguard Mid and SPDR Portfolio go up and down completely randomly.
Pair Corralation between Vanguard Mid and SPDR Portfolio
Considering the 90-day investment horizon Vanguard Mid Cap Value is expected to generate 0.99 times more return on investment than SPDR Portfolio. However, Vanguard Mid Cap Value is 1.01 times less risky than SPDR Portfolio. It trades about 0.04 of its potential returns per unit of risk. SPDR Portfolio SP is currently generating about 0.01 per unit of risk. If you would invest 16,428 in Vanguard Mid Cap Value on November 1, 2024 and sell it today you would earn a total of 271.00 from holding Vanguard Mid Cap Value or generate 1.65% 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. SPDR Portfolio SP
Performance |
| Timeline |
| Vanguard Mid Cap |
| SPDR Portfolio SP |
Vanguard Mid and SPDR Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Mid and SPDR Portfolio
The main advantage of trading using opposite Vanguard Mid and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Mid position performs unexpectedly, SPDR Portfolio 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 SPDR Portfolio will offset losses from the drop in SPDR Portfolio'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 |
| SPDR Portfolio vs. iShares Core High | SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. Schwab Dividend Equity | SPDR Portfolio vs. Vanguard High Dividend |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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