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 International 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
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vanguard and Voya is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total International 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 International 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 International is expected to under-perform the Voya Vacs. But the mutual fund apears to be less risky and, when comparing its historical volatility, Vanguard Total International is 1.1 times less risky than Voya Vacs. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Voya Vacs Index is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,140 in Voya Vacs Index on September 3, 2024 and sell it today you would lose (8.00) from holding Voya Vacs Index or give up 0.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total International vs. Voya Vacs Index
Performance |
| Timeline |
| Vanguard Total Inter |
| 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. Vanguard Total Bond | Vanguard Total vs. Vanguard Extended Market | Vanguard Total vs. Vanguard Small Cap Index | Vanguard Total vs. Vanguard Mid Cap Index |
| Voya Vacs vs. Vanguard Total International | Voya Vacs vs. Vanguard Total International | Voya Vacs vs. Vanguard Total International | Voya Vacs 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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