Correlation Between Vanguard Extended and Vanguard Growth
Can any of the company-specific risk be diversified away by investing in both Vanguard Extended and Vanguard Growth 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 Extended and Vanguard Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Extended Market and Vanguard Growth Index, you can compare the effects of market volatilities on Vanguard Extended and Vanguard Growth 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 Extended with a short position of Vanguard Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Extended and Vanguard Growth.
Diversification Opportunities for Vanguard Extended and Vanguard Growth
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vanguard and Vanguard is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Extended Market and Vanguard Growth Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Growth Index and Vanguard Extended 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 Extended Market are associated (or correlated) with Vanguard Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Growth Index has no effect on the direction of Vanguard Extended i.e., Vanguard Extended and Vanguard Growth go up and down completely randomly.
Pair Corralation between Vanguard Extended and Vanguard Growth
Assuming the 90 days horizon Vanguard Extended is expected to generate 1.67 times less return on investment than Vanguard Growth. But when comparing it to its historical volatility, Vanguard Extended Market is 1.01 times less risky than Vanguard Growth. It trades about 0.04 of its potential returns per unit of risk. Vanguard Growth Index is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 17,560 in Vanguard Growth Index on December 2, 2024 and sell it today you would earn a total of 3,324 from holding Vanguard Growth Index or generate 18.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Extended Market vs. Vanguard Growth Index
Performance |
| Timeline |
| Vanguard Extended Market |
| Vanguard Growth Index |
Vanguard Extended and Vanguard Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Extended and Vanguard Growth
The main advantage of trading using opposite Vanguard Extended and Vanguard Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Extended position performs unexpectedly, Vanguard Growth 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 Growth will offset losses from the drop in Vanguard Growth's long position.| Vanguard Extended vs. Flakqx | Vanguard Extended vs. Aam Select Income | Vanguard Extended vs. Fxybjx | Vanguard Extended vs. Fuhkbx |
| Vanguard Growth vs. Small Pany Growth | Vanguard Growth vs. Touchstone Sands Capital | Vanguard Growth vs. Profunds Large Cap Growth | Vanguard Growth vs. The Hartford Growth |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |