Correlation Between Vanguard Total and General Money
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and General Money 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 Total and General Money into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Stock and General Money Market, you can compare the effects of market volatilities on Vanguard Total and General Money 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 Total with a short position of General Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and General Money.
Diversification Opportunities for Vanguard Total and General Money
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and General is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock and General Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Money Market and Vanguard Total 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 Total Stock are associated (or correlated) with General Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Money Market has no effect on the direction of Vanguard Total i.e., Vanguard Total and General Money go up and down completely randomly.
Pair Corralation between Vanguard Total and General Money
Assuming the 90 days horizon Vanguard Total Stock is expected to generate 3.46 times more return on investment than General Money. However, Vanguard Total is 3.46 times more volatile than General Money Market. It trades about 0.12 of its potential returns per unit of risk. General Money Market is currently generating about 0.08 per unit of risk. If you would invest 20,727 in Vanguard Total Stock on August 28, 2024 and sell it today you would earn a total of 7,827 from holding Vanguard Total Stock or generate 37.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.16% |
| Values | Daily Returns |
Vanguard Total Stock vs. General Money Market
Performance |
| Timeline |
| Vanguard Total Stock |
| General Money Market |
Vanguard Total and General Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and General Money
The main advantage of trading using opposite Vanguard Total and General Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, General Money 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 General Money will offset losses from the drop in General Money's long position.| Vanguard Total vs. Icon Financial Fund | Vanguard Total vs. Financials Ultrasector Profund | Vanguard Total vs. Angel Oak Financial | Vanguard Total vs. Transamerica Financial Life |
| General Money vs. Hennessy Nerstone Mid | General Money vs. Ultramid Cap Profund Ultramid Cap | General Money vs. Boston Partners Small | General Money vs. Mutual Of America |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |