Correlation Between Vanguard Total and Voya Vacs
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Voya Vacs 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 Voya Vacs 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 Voya Vacs Index, you can compare the effects of market volatilities on Vanguard Total and Voya Vacs 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 Voya Vacs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Voya Vacs.
Diversification Opportunities for Vanguard Total and Voya Vacs
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and Voya is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock and Voya Vacs Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Vacs Index 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 Voya Vacs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Vacs Index has no effect on the direction of Vanguard Total i.e., Vanguard Total and Voya Vacs go up and down completely randomly.
Pair Corralation between Vanguard Total and Voya Vacs
Assuming the 90 days horizon Vanguard Total Stock is expected to generate 1.02 times more return on investment than Voya Vacs. However, Vanguard Total is 1.02 times more volatile than Voya Vacs Index. It trades about 0.13 of its potential returns per unit of risk. Voya Vacs Index is currently generating about 0.12 per unit of risk. If you would invest 12,750 in Vanguard Total Stock on September 3, 2024 and sell it today you would earn a total of 1,835 from holding Vanguard Total Stock or generate 14.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total Stock vs. Voya Vacs Index
Performance |
| Timeline |
| Vanguard Total Stock |
| Voya Vacs Index |
Vanguard Total and Voya Vacs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Voya Vacs
The main advantage of trading using opposite Vanguard Total and Voya Vacs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Voya Vacs 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 Voya Vacs will offset losses from the drop in Voya Vacs' long position.| Vanguard Total vs. T Rowe Price | Vanguard Total vs. T Rowe Price | Vanguard Total vs. T Rowe Price | Vanguard Total vs. T Rowe Price |
| Voya Vacs vs. Vanguard Total Stock | Voya Vacs vs. Vanguard 500 Index | Voya Vacs vs. Vanguard Total Stock | Voya Vacs vs. Vanguard Total Stock |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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