Correlation Between Vanguard Total and YieldMax Magnificent
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and YieldMax Magnificent 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 YieldMax Magnificent 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 YieldMax Magnificent 7, you can compare the effects of market volatilities on Vanguard Total and YieldMax Magnificent 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 YieldMax Magnificent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and YieldMax Magnificent.
Diversification Opportunities for Vanguard Total and YieldMax Magnificent
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and YieldMax is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock and YieldMax Magnificent 7 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YieldMax Magnificent 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 YieldMax Magnificent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YieldMax Magnificent has no effect on the direction of Vanguard Total i.e., Vanguard Total and YieldMax Magnificent go up and down completely randomly.
Pair Corralation between Vanguard Total and YieldMax Magnificent
Considering the 90-day investment horizon Vanguard Total is expected to generate 2.22 times less return on investment than YieldMax Magnificent. But when comparing it to its historical volatility, Vanguard Total Stock is 1.49 times less risky than YieldMax Magnificent. It trades about 0.13 of its potential returns per unit of risk. YieldMax Magnificent 7 is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,827 in YieldMax Magnificent 7 on August 23, 2024 and sell it today you would earn a total of 106.00 from holding YieldMax Magnificent 7 or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total Stock vs. YieldMax Magnificent 7
Performance |
| Timeline |
| Vanguard Total Stock |
| YieldMax Magnificent |
Vanguard Total and YieldMax Magnificent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and YieldMax Magnificent
The main advantage of trading using opposite Vanguard Total and YieldMax Magnificent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, YieldMax Magnificent 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 YieldMax Magnificent will offset losses from the drop in YieldMax Magnificent'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 |
| YieldMax Magnificent vs. iShares ESG Aware | YieldMax Magnificent vs. iShares ESG Aware | YieldMax Magnificent vs. Vanguard ESG Stock | YieldMax Magnificent vs. HUMANA INC |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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