Correlation Between Vanguard Total and Aim International
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Aim 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 Aim 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 Aim International Mutual, you can compare the effects of market volatilities on Vanguard Total and Aim 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 Aim International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Aim International.
Diversification Opportunities for Vanguard Total and Aim International
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and Aim is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total International and Aim International Mutual in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aim International Mutual 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 Aim International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aim International Mutual has no effect on the direction of Vanguard Total i.e., Vanguard Total and Aim International go up and down completely randomly.
Pair Corralation between Vanguard Total and Aim International
Assuming the 90 days horizon Vanguard Total is expected to generate 1.64 times less return on investment than Aim International. But when comparing it to its historical volatility, Vanguard Total International is 1.11 times less risky than Aim International. It trades about 0.06 of its potential returns per unit of risk. Aim International Mutual is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,027 in Aim International Mutual on September 3, 2024 and sell it today you would earn a total of 219.00 from holding Aim International Mutual or generate 10.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 30.91% |
| Values | Daily Returns |
Vanguard Total International vs. Aim International Mutual
Performance |
| Timeline |
| Vanguard Total Inter |
| Aim International Mutual |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Vanguard Total and Aim International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Aim International
The main advantage of trading using opposite Vanguard Total and Aim International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Aim 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 Aim International will offset losses from the drop in Aim International's long position.| Vanguard Total vs. Adams Diversified Equity | Vanguard Total vs. Principal Lifetime Hybrid | Vanguard Total vs. Pgim Jennison Diversified | Vanguard Total vs. Massmutual Premier Diversified |
| Aim International vs. Prudential Jennison Financial | Aim International vs. Davis Financial Fund | Aim International vs. 1919 Financial Services | Aim International vs. Angel Oak Financial |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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