Correlation Between Vanguard Growth and HCM Defender
Can any of the company-specific risk be diversified away by investing in both Vanguard Growth and HCM Defender 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 HCM Defender 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 HCM Defender 100, you can compare the effects of market volatilities on Vanguard Growth and HCM Defender 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 HCM Defender. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Growth and HCM Defender.
Diversification Opportunities for Vanguard Growth and HCM Defender
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and HCM is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Growth Index and HCM Defender 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCM Defender 100 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 HCM Defender. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCM Defender 100 has no effect on the direction of Vanguard Growth i.e., Vanguard Growth and HCM Defender go up and down completely randomly.
Pair Corralation between Vanguard Growth and HCM Defender
Considering the 90-day investment horizon Vanguard Growth is expected to generate 1.04 times less return on investment than HCM Defender. But when comparing it to its historical volatility, Vanguard Growth Index is 1.18 times less risky than HCM Defender. It trades about 0.12 of its potential returns per unit of risk. HCM Defender 100 is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,525 in HCM Defender 100 on August 30, 2024 and sell it today you would earn a total of 3,026 from holding HCM Defender 100 or generate 85.84% 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. HCM Defender 100
Performance |
| Timeline |
| Vanguard Growth Index |
| HCM Defender 100 |
Vanguard Growth and HCM Defender Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Growth and HCM Defender
The main advantage of trading using opposite Vanguard Growth and HCM Defender positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Growth position performs unexpectedly, HCM Defender 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 HCM Defender will offset losses from the drop in HCM Defender'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 |
| HCM Defender vs. iShares MSCI USA | HCM Defender vs. iShares MSCI USA | HCM Defender vs. iShares MSCI USA | HCM Defender vs. iShares Expanded Tech Software |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |