Correlation Between Vanguard Total and International Fund
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and International 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 International Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total International and International Fund International, you can compare the effects of market volatilities on Vanguard Total and International 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 International Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and International Fund.
Diversification Opportunities for Vanguard Total and International Fund
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and International is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total International and International Fund Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Fund 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 International are associated (or correlated) with International Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Fund has no effect on the direction of Vanguard Total i.e., Vanguard Total and International Fund go up and down completely randomly.
Pair Corralation between Vanguard Total and International Fund
Assuming the 90 days horizon Vanguard Total is expected to generate 1.04 times less return on investment than International Fund. In addition to that, Vanguard Total is 1.23 times more volatile than International Fund International. It trades about 0.05 of its total potential returns per unit of risk. International Fund International is currently generating about 0.07 per unit of volatility. If you would invest 3,176 in International Fund International on August 31, 2024 and sell it today you would earn a total of 512.00 from holding International Fund International or generate 16.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Vanguard Total International vs. International Fund Internation
Performance |
| Timeline |
| Vanguard Total Inter |
| International Fund |
Vanguard Total and International Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and International Fund
The main advantage of trading using opposite Vanguard Total and International Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, International 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 International Fund will offset losses from the drop in International Fund's long position.| Vanguard Total vs. Vanguard Total Bond | Vanguard Total vs. Vanguard Extended Market | Vanguard Total vs. Vanguard Small Cap Index | Vanguard Total vs. Vanguard Mid Cap Index |
| International Fund vs. Large Cap Growth | International Fund vs. Parnassus Mid Cap | International Fund vs. Parnassus E Equity | International Fund vs. Doubleline Total Return |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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