Correlation Between Vanguard FTSE and Xtrackers Harvest
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE and Xtrackers Harvest 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 FTSE and Xtrackers Harvest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard FTSE Developed and Xtrackers Harvest CSI300, you can compare the effects of market volatilities on Vanguard FTSE and Xtrackers Harvest 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 FTSE with a short position of Xtrackers Harvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and Xtrackers Harvest.
Diversification Opportunities for Vanguard FTSE and Xtrackers Harvest
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and Xtrackers is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Developed and Xtrackers Harvest CSI300 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Harvest CSI300 and Vanguard FTSE 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 FTSE Developed are associated (or correlated) with Xtrackers Harvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Harvest CSI300 has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and Xtrackers Harvest go up and down completely randomly.
Pair Corralation between Vanguard FTSE and Xtrackers Harvest
Assuming the 90 days trading horizon Vanguard FTSE Developed is expected to generate 0.64 times more return on investment than Xtrackers Harvest. However, Vanguard FTSE Developed is 1.56 times less risky than Xtrackers Harvest. It trades about 0.05 of its potential returns per unit of risk. Xtrackers Harvest CSI300 is currently generating about 0.0 per unit of risk. If you would invest 3,850 in Vanguard FTSE Developed on August 26, 2024 and sell it today you would earn a total of 824.00 from holding Vanguard FTSE Developed or generate 21.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Vanguard FTSE Developed vs. Xtrackers Harvest CSI300
Performance |
| Timeline |
| Vanguard FTSE Developed |
| Xtrackers Harvest CSI300 |
Vanguard FTSE and Xtrackers Harvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and Xtrackers Harvest
The main advantage of trading using opposite Vanguard FTSE and Xtrackers Harvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE position performs unexpectedly, Xtrackers Harvest 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 Xtrackers Harvest will offset losses from the drop in Xtrackers Harvest's long position.| Vanguard FTSE vs. Leverage Shares 2x | Vanguard FTSE vs. Amundi Index Solutions | Vanguard FTSE vs. Amundi Index Solutions | Vanguard FTSE vs. Albion Venture Capital |
| Xtrackers Harvest vs. Xtrackers MSCI | Xtrackers Harvest vs. Xtrackers FTSE 250 | Xtrackers Harvest vs. Xtrackers Ie Plc | Xtrackers Harvest vs. Xtrackers Russell 2000 |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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