Correlation Between Vanguard Total and Western Asset
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Western Asset 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 Western Asset 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 Western Asset Intermediate, you can compare the effects of market volatilities on Vanguard Total and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Western Asset.
Diversification Opportunities for Vanguard Total and Western Asset
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vanguard and Western is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock and Western Asset Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Interm 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Interm has no effect on the direction of Vanguard Total i.e., Vanguard Total and Western Asset go up and down completely randomly.
Pair Corralation between Vanguard Total and Western Asset
Assuming the 90 days horizon Vanguard Total Stock is expected to generate 4.47 times more return on investment than Western Asset. However, Vanguard Total is 4.47 times more volatile than Western Asset Intermediate. It trades about 0.11 of its potential returns per unit of risk. Western Asset Intermediate is currently generating about 0.05 per unit of risk. If you would invest 9,302 in Vanguard Total Stock on August 28, 2024 and sell it today you would earn a total of 5,194 from holding Vanguard Total Stock or generate 55.84% 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. Western Asset Intermediate
Performance |
| Timeline |
| Vanguard Total Stock |
| Western Asset Interm |
Vanguard Total and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Western Asset
The main advantage of trading using opposite Vanguard Total and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Vanguard Total vs. Fidelity Series Government | Vanguard Total vs. Franklin Adjustable Government | Vanguard Total vs. Prudential Government Income | Vanguard Total vs. Ab Government Exchange |
| Western Asset vs. Clearbridge Aggressive Growth | Western Asset vs. Clearbridge Small Cap | Western Asset vs. Qs International Equity | Western Asset vs. Clearbridge Appreciation Fund |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |