Correlation Between Vanguard Total and Dfa Intl
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Dfa Intl 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 Dfa Intl 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 Dfa Intl Core, you can compare the effects of market volatilities on Vanguard Total and Dfa Intl 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 Dfa Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Dfa Intl.
Diversification Opportunities for Vanguard Total and Dfa Intl
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vanguard and Dfa is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock and Dfa Intl Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Intl Core 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 Dfa Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Intl Core has no effect on the direction of Vanguard Total i.e., Vanguard Total and Dfa Intl go up and down completely randomly.
Pair Corralation between Vanguard Total and Dfa Intl
Assuming the 90 days horizon Vanguard Total Stock is expected to generate 0.99 times more return on investment than Dfa Intl. However, Vanguard Total Stock is 1.01 times less risky than Dfa Intl. It trades about 0.14 of its potential returns per unit of risk. Dfa Intl Core is currently generating about -0.01 per unit of risk. If you would invest 12,595 in Vanguard Total Stock on September 1, 2024 and sell it today you would earn a total of 1,994 from holding Vanguard Total Stock or generate 15.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total Stock vs. Dfa Intl Core
Performance |
| Timeline |
| Vanguard Total Stock |
| Dfa Intl Core |
Vanguard Total and Dfa Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Dfa Intl
The main advantage of trading using opposite Vanguard Total and Dfa Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Dfa Intl 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 Dfa Intl will offset losses from the drop in Dfa Intl'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 |
| Dfa Intl vs. Legg Mason Partners | Dfa Intl vs. Valic Company I | Dfa Intl vs. Metropolitan West High | Dfa Intl vs. Alpine High Yield |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |