Correlation Between Vanguard FTSE and Multi Units
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE 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 FTSE 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 FTSE Developed and Multi Units Luxembourg, you can compare the effects of market volatilities on Vanguard FTSE 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 FTSE with a short position of Multi Units. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and Multi Units.
Diversification Opportunities for Vanguard FTSE and Multi Units
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and Multi is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Developed 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 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 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 FTSE i.e., Vanguard FTSE and Multi Units go up and down completely randomly.
Pair Corralation between Vanguard FTSE and Multi Units
Assuming the 90 days trading horizon Vanguard FTSE Developed is expected to under-perform the Multi Units. But the etf apears to be less risky and, when comparing its historical volatility, Vanguard FTSE Developed is 1.17 times less risky than Multi Units. The etf trades about -0.12 of its potential returns per unit of risk. The Multi Units Luxembourg is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 269,825 in Multi Units Luxembourg on September 2, 2024 and sell it today you would earn a total of 1,650 from holding Multi Units Luxembourg or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard FTSE Developed vs. Multi Units Luxembourg
Performance |
| Timeline |
| Vanguard FTSE Developed |
| Multi Units Luxembourg |
Vanguard FTSE and Multi Units Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and Multi Units
The main advantage of trading using opposite Vanguard FTSE and Multi Units positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE 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' 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 |
| Multi Units vs. GraniteShares 3x Short | Multi Units vs. WisdomTree Natural Gas | Multi Units vs. Leverage Shares 3x | Multi Units vs. WisdomTree Natural Gas |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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