Correlation Between Vanguard Total and Vela International
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Vela 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 Vela 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 Vela International, you can compare the effects of market volatilities on Vanguard Total and Vela 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 Vela International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Vela International.
Diversification Opportunities for Vanguard Total and Vela International
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Vela is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total International and Vela International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vela 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 Vela International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vela International has no effect on the direction of Vanguard Total i.e., Vanguard Total and Vela International go up and down completely randomly.
Pair Corralation between Vanguard Total and Vela International
Assuming the 90 days horizon Vanguard Total International is expected to generate 1.09 times more return on investment than Vela International. However, Vanguard Total is 1.09 times more volatile than Vela International. It trades about 0.05 of its potential returns per unit of risk. Vela International is currently generating about 0.04 per unit of risk. If you would invest 2,879 in Vanguard Total International on August 31, 2024 and sell it today you would earn a total of 429.00 from holding Vanguard Total International or generate 14.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Vanguard Total International vs. Vela International
Performance |
| Timeline |
| Vanguard Total Inter |
| Vela International |
Vanguard Total and Vela International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Vela International
The main advantage of trading using opposite Vanguard Total and Vela International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Vela 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 Vela International will offset losses from the drop in Vela 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 |
| Vela International vs. Allianzgi Convertible Income | Vela International vs. Fidelity Sai Convertible | Vela International vs. Harbor Vertible Securities | Vela International vs. Advent Claymore Convertible |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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