Correlation Between Vanguard Total and Sextant International
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Sextant International 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 Sextant International 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 Sextant International Fund, you can compare the effects of market volatilities on Vanguard Total and Sextant International 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 Sextant International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Sextant International.
Diversification Opportunities for Vanguard Total and Sextant International
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Sextant is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total International and Sextant International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sextant International 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 Sextant International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sextant International has no effect on the direction of Vanguard Total i.e., Vanguard Total and Sextant International go up and down completely randomly.
Pair Corralation between Vanguard Total and Sextant International
Assuming the 90 days horizon Vanguard Total is expected to generate 1.22 times less return on investment than Sextant International. But when comparing it to its historical volatility, Vanguard Total International is 1.61 times less risky than Sextant International. It trades about 0.31 of its potential returns per unit of risk. Sextant International Fund is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2,213 in Sextant International Fund on November 2, 2024 and sell it today you would earn a total of 118.00 from holding Sextant International Fund or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total International vs. Sextant International Fund
Performance |
| Timeline |
| Vanguard Total Inter |
| Sextant International |
Vanguard Total and Sextant International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Sextant International
The main advantage of trading using opposite Vanguard Total and Sextant International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Sextant International 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 Sextant International will offset losses from the drop in Sextant International'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 |
| Sextant International vs. Sextant International Fund | Sextant International vs. Sextant Growth Fund | Sextant International vs. Sextant Global High | Sextant International vs. Sextant Bond Income |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |