Correlation Between Vanguard Developed and Aim International
Can any of the company-specific risk be diversified away by investing in both Vanguard Developed 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 Developed 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 Developed Markets and Aim International Mutual, you can compare the effects of market volatilities on Vanguard Developed 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 Developed with a short position of Aim International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Developed and Aim International.
Diversification Opportunities for Vanguard Developed and Aim International
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vanguard and Aim is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Developed Markets 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 Developed 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 Developed Markets 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 Developed i.e., Vanguard Developed and Aim International go up and down completely randomly.
Pair Corralation between Vanguard Developed and Aim International
If you would invest 1,369 in Vanguard Developed Markets on September 4, 2024 and sell it today you would earn a total of 247.00 from holding Vanguard Developed Markets or generate 18.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.35% |
| Values | Daily Returns |
Vanguard Developed Markets vs. Aim International Mutual
Performance |
| Timeline |
| Vanguard Developed |
| Aim International Mutual |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Vanguard Developed and Aim International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Developed and Aim International
The main advantage of trading using opposite Vanguard Developed and Aim International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Developed 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 Developed vs. Vanguard Emerging Markets | Vanguard Developed vs. Vanguard Small Cap Index | Vanguard Developed vs. Vanguard Total Bond | Vanguard Developed vs. Vanguard Mid Cap Index |
| Aim International vs. Pender Real Estate | Aim International vs. Deutsche Real Estate | Aim International vs. Nuveen Real Estate | Aim International vs. Virtus Real Estate |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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