Correlation Between Vanguard Value and Clipper Fund
Can any of the company-specific risk be diversified away by investing in both Vanguard Value and Clipper Fund 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 Value and Clipper Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Value Index and Clipper Fund Inc, you can compare the effects of market volatilities on Vanguard Value and Clipper Fund 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 Value with a short position of Clipper Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Value and Clipper Fund.
Diversification Opportunities for Vanguard Value and Clipper Fund
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Clipper is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Value Index and Clipper Fund Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clipper Fund and Vanguard Value 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 Value Index are associated (or correlated) with Clipper Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clipper Fund has no effect on the direction of Vanguard Value i.e., Vanguard Value and Clipper Fund go up and down completely randomly.
Pair Corralation between Vanguard Value and Clipper Fund
Assuming the 90 days horizon Vanguard Value Index is expected to under-perform the Clipper Fund. But the mutual fund apears to be less risky and, when comparing its historical volatility, Vanguard Value Index is 1.4 times less risky than Clipper Fund. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Clipper Fund Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 14,865 in Clipper Fund Inc on September 13, 2024 and sell it today you would earn a total of 592.00 from holding Clipper Fund Inc or generate 3.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Value Index vs. Clipper Fund Inc
Performance |
| Timeline |
| Vanguard Value Index |
| Clipper Fund |
Vanguard Value and Clipper Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Value and Clipper Fund
The main advantage of trading using opposite Vanguard Value and Clipper Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Value position performs unexpectedly, Clipper Fund 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 Clipper Fund will offset losses from the drop in Clipper Fund's long position.| Vanguard Value vs. Vanguard Small Cap Value | Vanguard Value vs. Vanguard Growth Index | Vanguard Value vs. Vanguard Mid Cap Value | Vanguard Value vs. Vanguard Small Cap Index |
| Clipper Fund vs. Value Fund Value | Clipper Fund vs. Meridian Trarian Fund | Clipper Fund vs. Longleaf Partners Fund | Clipper Fund vs. Mairs Power Growth |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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