Correlation Between Vanguard Growth and FundX Aggressive
Can any of the company-specific risk be diversified away by investing in both Vanguard Growth and FundX Aggressive 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 FundX Aggressive 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 FundX Aggressive ETF, you can compare the effects of market volatilities on Vanguard Growth and FundX Aggressive 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 FundX Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Growth and FundX Aggressive.
Diversification Opportunities for Vanguard Growth and FundX Aggressive
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and FundX is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Growth Index and FundX Aggressive ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FundX Aggressive ETF 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 FundX Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FundX Aggressive ETF has no effect on the direction of Vanguard Growth i.e., Vanguard Growth and FundX Aggressive go up and down completely randomly.
Pair Corralation between Vanguard Growth and FundX Aggressive
Considering the 90-day investment horizon Vanguard Growth Index is expected to generate 0.89 times more return on investment than FundX Aggressive. However, Vanguard Growth Index is 1.12 times less risky than FundX Aggressive. It trades about 0.35 of its potential returns per unit of risk. FundX Aggressive ETF is currently generating about 0.29 per unit of risk. If you would invest 38,292 in Vanguard Growth Index on September 1, 2024 and sell it today you would earn a total of 2,621 from holding Vanguard Growth Index or generate 6.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vanguard Growth Index vs. FundX Aggressive ETF
Performance |
| Timeline |
| Vanguard Growth Index |
| FundX Aggressive ETF |
Vanguard Growth and FundX Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Growth and FundX Aggressive
The main advantage of trading using opposite Vanguard Growth and FundX Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Growth position performs unexpectedly, FundX Aggressive 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 FundX Aggressive will offset losses from the drop in FundX Aggressive'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 |
| FundX Aggressive vs. Vanguard Growth Index | FundX Aggressive vs. iShares Russell 1000 | FundX Aggressive vs. iShares SP 500 | FundX Aggressive 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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