Correlation Between Vanguard Total and Wilshire International
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Wilshire 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 Wilshire 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 Wilshire International Equity, you can compare the effects of market volatilities on Vanguard Total and Wilshire 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 Wilshire International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Wilshire International.
Diversification Opportunities for Vanguard Total and Wilshire International
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Wilshire is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total International and Wilshire International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilshire 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 Wilshire International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilshire International has no effect on the direction of Vanguard Total i.e., Vanguard Total and Wilshire International go up and down completely randomly.
Pair Corralation between Vanguard Total and Wilshire International
Assuming the 90 days horizon Vanguard Total International is expected to under-perform the Wilshire International. In addition to that, Vanguard Total is 1.03 times more volatile than Wilshire International Equity. It trades about -0.18 of its total potential returns per unit of risk. Wilshire International Equity is currently generating about -0.15 per unit of volatility. If you would invest 1,173 in Wilshire International Equity on August 29, 2024 and sell it today you would lose (28.00) from holding Wilshire International Equity or give up 2.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Vanguard Total International vs. Wilshire International Equity
Performance |
| Timeline |
| Vanguard Total Inter |
| Wilshire International |
Vanguard Total and Wilshire International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Wilshire International
The main advantage of trading using opposite Vanguard Total and Wilshire International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Wilshire 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 Wilshire International will offset losses from the drop in Wilshire 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 |
| Wilshire International vs. Siit Ultra Short | Wilshire International vs. Astor Longshort Fund | Wilshire International vs. Quantitative Longshort Equity | Wilshire International vs. Angel Oak Ultrashort |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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