Correlation Between Vanguard Growth and Xtrackers Russell
Can any of the company-specific risk be diversified away by investing in both Vanguard Growth and Xtrackers Russell 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 Russell 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 Russell Multifactor, you can compare the effects of market volatilities on Vanguard Growth and Xtrackers Russell 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 Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Growth and Xtrackers Russell.
Diversification Opportunities for Vanguard Growth and Xtrackers Russell
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Xtrackers is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Growth Index and Xtrackers Russell Multifactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Russell 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 Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Russell has no effect on the direction of Vanguard Growth i.e., Vanguard Growth and Xtrackers Russell go up and down completely randomly.
Pair Corralation between Vanguard Growth and Xtrackers Russell
Considering the 90-day investment horizon Vanguard Growth Index is expected to generate 1.46 times more return on investment than Xtrackers Russell. However, Vanguard Growth is 1.46 times more volatile than Xtrackers Russell Multifactor. It trades about 0.11 of its potential returns per unit of risk. Xtrackers Russell Multifactor is currently generating about 0.15 per unit of risk. If you would invest 34,984 in Vanguard Growth Index on August 29, 2024 and sell it today you would earn a total of 5,824 from holding Vanguard Growth Index or generate 16.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Growth Index vs. Xtrackers Russell Multifactor
Performance |
| Timeline |
| Vanguard Growth Index |
| Xtrackers Russell |
Vanguard Growth and Xtrackers Russell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Growth and Xtrackers Russell
The main advantage of trading using opposite Vanguard Growth and Xtrackers Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Growth position performs unexpectedly, Xtrackers Russell 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 Russell will offset losses from the drop in Xtrackers Russell'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 Russell vs. Vanguard Mid Cap Index | Xtrackers Russell vs. iShares Core SP | Xtrackers Russell vs. SPDR SP MIDCAP | Xtrackers Russell vs. Vanguard SP Mid Cap |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |