Correlation Between Vanguard Strategic and Large Cap
Can any of the company-specific risk be diversified away by investing in both Vanguard Strategic and Large Cap 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 Strategic and Large Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Strategic Equity and Large Cap Equity, you can compare the effects of market volatilities on Vanguard Strategic and Large Cap 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 Strategic with a short position of Large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Strategic and Large Cap.
Diversification Opportunities for Vanguard Strategic and Large Cap
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Large is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Strategic Equity and Large Cap Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Equity and Vanguard Strategic 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 Strategic Equity are associated (or correlated) with Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Equity has no effect on the direction of Vanguard Strategic i.e., Vanguard Strategic and Large Cap go up and down completely randomly.
Pair Corralation between Vanguard Strategic and Large Cap
Assuming the 90 days horizon Vanguard Strategic Equity is expected to generate 1.18 times more return on investment than Large Cap. However, Vanguard Strategic is 1.18 times more volatile than Large Cap Equity. It trades about 0.08 of its potential returns per unit of risk. Large Cap Equity is currently generating about 0.05 per unit of risk. If you would invest 2,964 in Vanguard Strategic Equity on September 2, 2024 and sell it today you would earn a total of 1,376 from holding Vanguard Strategic Equity or generate 46.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Strategic Equity vs. Large Cap Equity
Performance |
| Timeline |
| Vanguard Strategic Equity |
| Large Cap Equity |
Vanguard Strategic and Large Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Strategic and Large Cap
The main advantage of trading using opposite Vanguard Strategic and Large Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Strategic position performs unexpectedly, Large Cap 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 Large Cap will offset losses from the drop in Large Cap's long position.| Vanguard Strategic vs. Vanguard Global Equity | Vanguard Strategic vs. Vanguard Explorer Fund | Vanguard Strategic vs. Vanguard Selected Value | Vanguard Strategic vs. Vanguard Windsor Ii |
| Large Cap vs. Fidelity Select Semiconductors | Large Cap vs. Westwood Largecap Value | Large Cap vs. Russell 2000 2x | Large Cap vs. Federated Hermes Conservative |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |