Correlation Between Vanguard Growth and Xtrackers FTSE
Can any of the company-specific risk be diversified away by investing in both Vanguard Growth and Xtrackers FTSE 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 Growth and Xtrackers FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Growth Index and Xtrackers FTSE Developed, you can compare the effects of market volatilities on Vanguard Growth and Xtrackers FTSE 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 Growth with a short position of Xtrackers FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Growth and Xtrackers FTSE.
Diversification Opportunities for Vanguard Growth and Xtrackers FTSE
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vanguard and Xtrackers is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Growth Index and Xtrackers FTSE Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers FTSE Developed and Vanguard Growth 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 Growth Index are associated (or correlated) with Xtrackers FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers FTSE Developed has no effect on the direction of Vanguard Growth i.e., Vanguard Growth and Xtrackers FTSE go up and down completely randomly.
Pair Corralation between Vanguard Growth and Xtrackers FTSE
Considering the 90-day investment horizon Vanguard Growth Index is expected to generate 1.26 times more return on investment than Xtrackers FTSE. However, Vanguard Growth is 1.26 times more volatile than Xtrackers FTSE Developed. It trades about 0.21 of its potential returns per unit of risk. Xtrackers FTSE Developed is currently generating about -0.06 per unit of risk. If you would invest 37,378 in Vanguard Growth Index on September 12, 2024 and sell it today you would earn a total of 4,616 from holding Vanguard Growth Index or generate 12.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Growth Index vs. Xtrackers FTSE Developed
Performance |
| Timeline |
| Vanguard Growth Index |
| Xtrackers FTSE Developed |
Vanguard Growth and Xtrackers FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Growth and Xtrackers FTSE
The main advantage of trading using opposite Vanguard Growth and Xtrackers FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Growth position performs unexpectedly, Xtrackers FTSE 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 Xtrackers FTSE will offset losses from the drop in Xtrackers FTSE's long position.| Vanguard Growth vs. Vanguard Value Index | Vanguard Growth vs. Vanguard Information Technology | Vanguard Growth vs. Vanguard Small Cap Growth | Vanguard Growth vs. Vanguard Dividend Appreciation |
| Xtrackers FTSE vs. Xtrackers Russell Multifactor | Xtrackers FTSE vs. Xtrackers MSCI All | Xtrackers FTSE vs. WisdomTree Dynamic Currency | Xtrackers FTSE vs. Xtrackers MSCI Eurozone |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |