Correlation Between Vanguard Target and Great West
Can any of the company-specific risk be diversified away by investing in both Vanguard Target and Great West 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 Target and Great West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Target Retirement and Great West Lifetime 2030, you can compare the effects of market volatilities on Vanguard Target and Great West 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 Target with a short position of Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Target and Great West.
Diversification Opportunities for Vanguard Target and Great West
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vanguard and Great is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Target Retirement and Great West Lifetime 2030 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifetime and Vanguard Target 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 Target Retirement are associated (or correlated) with Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifetime has no effect on the direction of Vanguard Target i.e., Vanguard Target and Great West go up and down completely randomly.
Pair Corralation between Vanguard Target and Great West
Assuming the 90 days horizon Vanguard Target Retirement is expected to generate 1.01 times more return on investment than Great West. However, Vanguard Target is 1.01 times more volatile than Great West Lifetime 2030. It trades about 0.11 of its potential returns per unit of risk. Great West Lifetime 2030 is currently generating about 0.06 per unit of risk. If you would invest 3,062 in Vanguard Target Retirement on September 12, 2024 and sell it today you would earn a total of 961.00 from holding Vanguard Target Retirement or generate 31.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Target Retirement vs. Great West Lifetime 2030
Performance |
| Timeline |
| Vanguard Target Reti |
| Great West Lifetime |
Vanguard Target and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Target and Great West
The main advantage of trading using opposite Vanguard Target and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Target position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West's long position.| Vanguard Target vs. Vanguard Target Retirement | Vanguard Target vs. Vanguard Target Retirement | Vanguard Target vs. Vanguard Target Retirement | Vanguard Target vs. Vanguard Target Retirement |
| Great West vs. Vanguard Target Retirement | Great West vs. Fidelity Freedom 2030 | Great West vs. HUMANA INC | Great West vs. Barloworld Ltd ADR |
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.
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