Correlation Between Vanguard Total and Bond Fund
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Bond Fund 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 Bond Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Stock and Bond Fund Class, you can compare the effects of market volatilities on Vanguard Total and Bond Fund 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 Bond Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Bond Fund.
Diversification Opportunities for Vanguard Total and Bond Fund
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vanguard and Bond is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock and Bond Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bond Fund Class 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 Stock are associated (or correlated) with Bond Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bond Fund Class has no effect on the direction of Vanguard Total i.e., Vanguard Total and Bond Fund go up and down completely randomly.
Pair Corralation between Vanguard Total and Bond Fund
Assuming the 90 days horizon Vanguard Total Stock is expected to generate 2.67 times more return on investment than Bond Fund. However, Vanguard Total is 2.67 times more volatile than Bond Fund Class. It trades about 0.21 of its potential returns per unit of risk. Bond Fund Class is currently generating about 0.08 per unit of risk. If you would invest 13,951 in Vanguard Total Stock on August 28, 2024 and sell it today you would earn a total of 550.00 from holding Vanguard Total Stock or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total Stock vs. Bond Fund Class
Performance |
| Timeline |
| Vanguard Total Stock |
| Bond Fund Class |
Vanguard Total and Bond Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Bond Fund
The main advantage of trading using opposite Vanguard Total and Bond Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Bond Fund 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 Bond Fund will offset losses from the drop in Bond Fund's long position.| Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Total Bond | Vanguard Total vs. Vanguard 500 Index | Vanguard Total vs. Vanguard Reit Index |
| Bond Fund vs. Strategic Enhanced Yield | Bond Fund vs. Cavanal Hill Hedged | Bond Fund vs. Limited Duration Fund | Bond Fund vs. Cavanal Hill Ultra |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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