Correlation Between Vanguard Total and Global X
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Global X 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 Global X 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 Global X MSCI, you can compare the effects of market volatilities on Vanguard Total and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Global X.
Diversification Opportunities for Vanguard Total and Global X
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vanguard and Global is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock and Global X MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X MSCI 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X MSCI has no effect on the direction of Vanguard Total i.e., Vanguard Total and Global X go up and down completely randomly.
Pair Corralation between Vanguard Total and Global X
Considering the 90-day investment horizon Vanguard Total Stock is expected to generate 0.73 times more return on investment than Global X. However, Vanguard Total Stock is 1.37 times less risky than Global X. It trades about 0.15 of its potential returns per unit of risk. Global X MSCI is currently generating about -0.01 per unit of risk. If you would invest 22,201 in Vanguard Total Stock on August 24, 2024 and sell it today you would earn a total of 7,304 from holding Vanguard Total Stock or generate 32.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total Stock vs. Global X MSCI
Performance |
| Timeline |
| Vanguard Total Stock |
| Global X MSCI |
Vanguard Total and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Global X
The main advantage of trading using opposite Vanguard Total and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X'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 |
| Global X vs. iShares MSCI Malaysia | Global X vs. iShares MSCI Hong | Global X vs. HUMANA INC | Global X vs. SCOR PK |
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 Positions Ratings module to 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.
Other Complementary Tools
| 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 | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |