Correlation Between Vanguard Value and Touchstone ETF
Can any of the company-specific risk be diversified away by investing in both Vanguard Value and Touchstone ETF 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 Value and Touchstone ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Value Index and Touchstone ETF Trust, you can compare the effects of market volatilities on Vanguard Value and Touchstone ETF 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 Value with a short position of Touchstone ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Value and Touchstone ETF.
Diversification Opportunities for Vanguard Value and Touchstone ETF
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Touchstone is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Value Index and Touchstone ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone ETF Trust and Vanguard Value 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 Value Index are associated (or correlated) with Touchstone ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone ETF Trust has no effect on the direction of Vanguard Value i.e., Vanguard Value and Touchstone ETF go up and down completely randomly.
Pair Corralation between Vanguard Value and Touchstone ETF
Considering the 90-day investment horizon Vanguard Value Index is expected to generate 1.02 times more return on investment than Touchstone ETF. However, Vanguard Value is 1.02 times more volatile than Touchstone ETF Trust. It trades about 0.17 of its potential returns per unit of risk. Touchstone ETF Trust is currently generating about 0.14 per unit of risk. If you would invest 15,843 in Vanguard Value Index on September 1, 2024 and sell it today you would earn a total of 2,344 from holding Vanguard Value Index or generate 14.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Vanguard Value Index vs. Touchstone ETF Trust
Performance |
| Timeline |
| Vanguard Value Index |
| Touchstone ETF Trust |
Vanguard Value and Touchstone ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Value and Touchstone ETF
The main advantage of trading using opposite Vanguard Value and Touchstone ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Value position performs unexpectedly, Touchstone ETF 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 Touchstone ETF will offset losses from the drop in Touchstone ETF's long position.| Vanguard Value vs. Vanguard Growth Index | Vanguard Value vs. Vanguard Small Cap Value | Vanguard Value vs. Vanguard Mid Cap Value | Vanguard Value vs. Vanguard Small Cap Index |
| Touchstone ETF vs. iShares Core SP | Touchstone ETF vs. iShares Core MSCI | Touchstone ETF vs. iShares Broad USD | Touchstone ETF vs. iShares Core SP |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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