Correlation Between Vanguard Growth and Xtrackers High
Can any of the company-specific risk be diversified away by investing in both Vanguard Growth and Xtrackers High 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 High 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 High Beta, you can compare the effects of market volatilities on Vanguard Growth and Xtrackers High 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 High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Growth and Xtrackers High.
Diversification Opportunities for Vanguard Growth and Xtrackers High
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Xtrackers is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Growth Index and Xtrackers High Beta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers High Beta 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 High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers High Beta has no effect on the direction of Vanguard Growth i.e., Vanguard Growth and Xtrackers High go up and down completely randomly.
Pair Corralation between Vanguard Growth and Xtrackers High
Considering the 90-day investment horizon Vanguard Growth Index is expected to generate 4.27 times more return on investment than Xtrackers High. However, Vanguard Growth is 4.27 times more volatile than Xtrackers High Beta. It trades about 0.13 of its potential returns per unit of risk. Xtrackers High Beta is currently generating about 0.2 per unit of risk. If you would invest 36,354 in Vanguard Growth Index on November 2, 2024 and sell it today you would earn a total of 5,641 from holding Vanguard Growth Index or generate 15.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Growth Index vs. Xtrackers High Beta
Performance |
| Timeline |
| Vanguard Growth Index |
| Xtrackers High Beta |
Vanguard Growth and Xtrackers High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Growth and Xtrackers High
The main advantage of trading using opposite Vanguard Growth and Xtrackers High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Growth position performs unexpectedly, Xtrackers High 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 High will offset losses from the drop in Xtrackers High'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 High vs. Xtrackers Short Duration | Xtrackers High vs. FlexShares High Yield | Xtrackers High vs. Xtrackers Low Beta | Xtrackers High vs. iShares Edge High |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |