Correlation Between Vanguard and MULTI UNITS
Can any of the company-specific risk be diversified away by investing in both Vanguard and MULTI UNITS 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 and MULTI UNITS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard SP 500 and MULTI UNITS LUXEMBOURG , you can compare the effects of market volatilities on Vanguard and MULTI UNITS 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 with a short position of MULTI UNITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard and MULTI UNITS.
Diversification Opportunities for Vanguard and MULTI UNITS
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vanguard and MULTI is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard SP 500 and MULTI UNITS LUXEMBOURG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MULTI UNITS LUXEMBOURG and Vanguard 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 SP 500 are associated (or correlated) with MULTI UNITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MULTI UNITS LUXEMBOURG has no effect on the direction of Vanguard i.e., Vanguard and MULTI UNITS go up and down completely randomly.
Pair Corralation between Vanguard and MULTI UNITS
Assuming the 90 days trading horizon Vanguard SP 500 is expected to generate 0.61 times more return on investment than MULTI UNITS. However, Vanguard SP 500 is 1.64 times less risky than MULTI UNITS. It trades about 0.35 of its potential returns per unit of risk. MULTI UNITS LUXEMBOURG is currently generating about 0.07 per unit of risk. If you would invest 9,379 in Vanguard SP 500 on September 3, 2024 and sell it today you would earn a total of 729.00 from holding Vanguard SP 500 or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Vanguard SP 500 vs. MULTI UNITS LUXEMBOURG
Performance |
| Timeline |
| Vanguard SP 500 |
| MULTI UNITS LUXEMBOURG |
Vanguard and MULTI UNITS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard and MULTI UNITS
The main advantage of trading using opposite Vanguard and MULTI UNITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard position performs unexpectedly, MULTI UNITS 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 MULTI UNITS will offset losses from the drop in MULTI UNITS's long position.| Vanguard vs. Vanguard FTSE Emerging | Vanguard vs. Vanguard USD Emerging | Vanguard vs. Vanguard FTSE Developed | Vanguard vs. Vanguard FTSE Japan |
| MULTI UNITS vs. UBSFund Solutions MSCI | MULTI UNITS vs. Vanguard SP 500 | MULTI UNITS vs. iShares VII PLC | MULTI UNITS 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |