Correlation Between Vanguard Total and Capitol Series
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Capitol Series 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 Capitol Series 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 Capitol Series Trust, you can compare the effects of market volatilities on Vanguard Total and Capitol Series 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 Capitol Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Capitol Series.
Diversification Opportunities for Vanguard Total and Capitol Series
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and Capitol is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock and Capitol Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitol Series 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 Capitol Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitol Series Trust has no effect on the direction of Vanguard Total i.e., Vanguard Total and Capitol Series go up and down completely randomly.
Pair Corralation between Vanguard Total and Capitol Series
Considering the 90-day investment horizon Vanguard Total Stock is expected to generate 1.15 times more return on investment than Capitol Series. However, Vanguard Total is 1.15 times more volatile than Capitol Series Trust. It trades about 0.39 of its potential returns per unit of risk. Capitol Series Trust is currently generating about 0.39 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 Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vanguard Total Stock vs. Capitol Series Trust
Performance |
| Timeline |
| Vanguard Total Stock |
| Capitol Series Trust |
Vanguard Total and Capitol Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Capitol Series
The main advantage of trading using opposite Vanguard Total and Capitol Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Capitol Series 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 Capitol Series will offset losses from the drop in Capitol Series' 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 |
| Capitol Series vs. First Trust LongShort | Capitol Series vs. Cambria Global Momentum | Capitol Series vs. Cambria Global Asset | Capitol Series vs. ProShares Hedge Replication |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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