Correlation Between Vanguard and ZKB Silver
Can any of the company-specific risk be diversified away by investing in both Vanguard and ZKB Silver 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 ZKB Silver 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 ZKB Silver ETF, you can compare the effects of market volatilities on Vanguard and ZKB Silver 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 ZKB Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard and ZKB Silver.
Diversification Opportunities for Vanguard and ZKB Silver
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Vanguard and ZKB is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard SP 500 and ZKB Silver ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZKB Silver ETF 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 ZKB Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZKB Silver ETF has no effect on the direction of Vanguard i.e., Vanguard and ZKB Silver go up and down completely randomly.
Pair Corralation between Vanguard and ZKB Silver
Assuming the 90 days trading horizon Vanguard SP 500 is expected to generate 0.51 times more return on investment than ZKB Silver. However, Vanguard SP 500 is 1.98 times less risky than ZKB Silver. It trades about 0.1 of its potential returns per unit of risk. ZKB Silver ETF is currently generating about 0.03 per unit of risk. If you would invest 6,720 in Vanguard SP 500 on September 5, 2024 and sell it today you would earn a total of 3,440 from holding Vanguard SP 500 or generate 51.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Vanguard SP 500 vs. ZKB Silver ETF
Performance |
| Timeline |
| Vanguard SP 500 |
| ZKB Silver ETF |
Vanguard and ZKB Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard and ZKB Silver
The main advantage of trading using opposite Vanguard and ZKB Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard position performs unexpectedly, ZKB Silver 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 ZKB Silver will offset losses from the drop in ZKB Silver's long position.| Vanguard vs. Vanguard FTSE Emerging | Vanguard vs. Vanguard USD Emerging | Vanguard vs. Vanguard FTSE Developed | Vanguard vs. Vanguard FTSE Japan |
| ZKB Silver vs. Vanguard SP 500 | ZKB Silver vs. iShares Core SP | ZKB Silver vs. Lyxor Japan UCITS | ZKB Silver vs. iShares Core MSCI |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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