Correlation Between Vanguard Total and IShares ETF
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and IShares ETF 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 IShares ETF 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 iShares ETF Trust, you can compare the effects of market volatilities on Vanguard Total and IShares ETF 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 IShares ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and IShares ETF.
Diversification Opportunities for Vanguard Total and IShares ETF
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and IShares is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock and iShares ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ETF Trust 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 IShares ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares ETF Trust has no effect on the direction of Vanguard Total i.e., Vanguard Total and IShares ETF go up and down completely randomly.
Pair Corralation between Vanguard Total and IShares ETF
Considering the 90-day investment horizon Vanguard Total Stock is expected to generate 2.91 times more return on investment than IShares ETF. However, Vanguard Total is 2.91 times more volatile than iShares ETF Trust. It trades about 0.39 of its potential returns per unit of risk. iShares ETF Trust is currently generating about 0.16 per unit of risk. If you would invest 28,103 in Vanguard Total Stock on September 1, 2024 and sell it today you would earn a total of 1,883 from holding Vanguard Total Stock or generate 6.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vanguard Total Stock vs. iShares ETF Trust
Performance |
| Timeline |
| Vanguard Total Stock |
| iShares ETF Trust |
Vanguard Total and IShares ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and IShares ETF
The main advantage of trading using opposite Vanguard Total and IShares ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, IShares ETF 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 IShares ETF will offset losses from the drop in IShares ETF's long position.| Vanguard Total vs. Vanguard SP 500 | Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Real Estate | Vanguard Total vs. Vanguard Total Bond |
| IShares ETF vs. Dimensional ETF Trust | IShares ETF vs. JPMorgan Inflation Managed | IShares ETF vs. Goldman Sachs ETF | IShares ETF vs. Dimensional ETF Trust |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |