Correlation Between Vanguard Total and Siit Small
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Siit Small 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 Siit Small 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 Siit Small Mid, you can compare the effects of market volatilities on Vanguard Total and Siit Small 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 Siit Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Siit Small.
Diversification Opportunities for Vanguard Total and Siit Small
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vanguard and Siit is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total International and Siit Small Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Small Mid 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 Siit Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Small Mid has no effect on the direction of Vanguard Total i.e., Vanguard Total and Siit Small go up and down completely randomly.
Pair Corralation between Vanguard Total and Siit Small
Assuming the 90 days horizon Vanguard Total International is expected to under-perform the Siit Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Vanguard Total International is 1.77 times less risky than Siit Small. The mutual fund trades about -0.16 of its potential returns per unit of risk. The Siit Small Mid is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,090 in Siit Small Mid on August 24, 2024 and sell it today you would earn a total of 62.00 from holding Siit Small Mid or generate 5.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total International vs. Siit Small Mid
Performance |
| Timeline |
| Vanguard Total Inter |
| Siit Small Mid |
Vanguard Total and Siit Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Siit Small
The main advantage of trading using opposite Vanguard Total and Siit Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Siit Small 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 Siit Small will offset losses from the drop in Siit Small'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 |
| Siit Small vs. Vanguard Mid Cap Index | Siit Small vs. Vanguard Total Bond | Siit Small vs. Vanguard Institutional Index | Siit Small vs. Vanguard Total International |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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