Correlation Between Vanguard and Vanguard Health
Can any of the company-specific risk be diversified away by investing in both Vanguard and Vanguard Health 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 and Vanguard Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard SP 500 and Vanguard Health Care, you can compare the effects of market volatilities on Vanguard and Vanguard Health 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 with a short position of Vanguard Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard and Vanguard Health.
Diversification Opportunities for Vanguard and Vanguard Health
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vanguard and Vanguard is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard SP 500 and Vanguard Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Health Care and Vanguard 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 SP 500 are associated (or correlated) with Vanguard Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Health Care has no effect on the direction of Vanguard i.e., Vanguard and Vanguard Health go up and down completely randomly.
Pair Corralation between Vanguard and Vanguard Health
Considering the 90-day investment horizon Vanguard SP 500 is expected to generate 0.95 times more return on investment than Vanguard Health. However, Vanguard SP 500 is 1.05 times less risky than Vanguard Health. It trades about 0.16 of its potential returns per unit of risk. Vanguard Health Care is currently generating about -0.09 per unit of risk. If you would invest 53,392 in Vanguard SP 500 on August 28, 2024 and sell it today you would earn a total of 1,531 from holding Vanguard SP 500 or generate 2.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard SP 500 vs. Vanguard Health Care
Performance |
| Timeline |
| Vanguard SP 500 |
| Vanguard Health Care |
Vanguard and Vanguard Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard and Vanguard Health
The main advantage of trading using opposite Vanguard and Vanguard Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard position performs unexpectedly, Vanguard Health 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 Vanguard Health will offset losses from the drop in Vanguard Health's long position.| Vanguard vs. Vanguard Total Stock | Vanguard vs. Vanguard High Dividend | Vanguard vs. Vanguard Information Technology | Vanguard vs. Invesco QQQ Trust |
| Vanguard Health vs. Vanguard Consumer Staples | Vanguard Health vs. Vanguard Financials Index | Vanguard Health vs. Vanguard Information Technology | Vanguard Health vs. Vanguard Consumer Discretionary |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |