Correlation Between Vanguard Total and Optimum International
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Optimum International 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 Optimum International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total International and Optimum International Fund, you can compare the effects of market volatilities on Vanguard Total and Optimum International 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 Optimum International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Optimum International.
Diversification Opportunities for Vanguard Total and Optimum International
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Optimum is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total International and Optimum International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optimum International 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 International are associated (or correlated) with Optimum International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optimum International has no effect on the direction of Vanguard Total i.e., Vanguard Total and Optimum International go up and down completely randomly.
Pair Corralation between Vanguard Total and Optimum International
Assuming the 90 days horizon Vanguard Total International is expected to under-perform the Optimum International. In addition to that, Vanguard Total is 1.04 times more volatile than Optimum International Fund. It trades about -0.22 of its total potential returns per unit of risk. Optimum International Fund is currently generating about -0.15 per unit of volatility. If you would invest 1,327 in Optimum International Fund on August 29, 2024 and sell it today you would lose (55.00) from holding Optimum International Fund or give up 4.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total International vs. Optimum International Fund
Performance |
| Timeline |
| Vanguard Total Inter |
| Optimum International |
Vanguard Total and Optimum International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Optimum International
The main advantage of trading using opposite Vanguard Total and Optimum International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Optimum International 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 Optimum International will offset losses from the drop in Optimum International's long position.| Vanguard Total vs. Vanguard Total Bond | Vanguard Total vs. Vanguard Total Stock | Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Small Cap Index |
| Optimum International vs. Scharf Global Opportunity | Optimum International vs. Balanced Fund Investor | Optimum International vs. Materials Portfolio Fidelity | Optimum International vs. Iaadx |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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