Correlation Between Vanguard International and ProShares Trust
Can any of the company-specific risk be diversified away by investing in both Vanguard International and ProShares Trust 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 International and ProShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard International Equity and ProShares Trust , you can compare the effects of market volatilities on Vanguard International and ProShares Trust 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 International with a short position of ProShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard International and ProShares Trust.
Diversification Opportunities for Vanguard International and ProShares Trust
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and ProShares is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard International Equity and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust and Vanguard International 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 International Equity are associated (or correlated) with ProShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Trust has no effect on the direction of Vanguard International i.e., Vanguard International and ProShares Trust go up and down completely randomly.
Pair Corralation between Vanguard International and ProShares Trust
Assuming the 90 days trading horizon Vanguard International Equity is expected to generate 0.8 times more return on investment than ProShares Trust. However, Vanguard International Equity is 1.24 times less risky than ProShares Trust. It trades about 0.04 of its potential returns per unit of risk. ProShares Trust is currently generating about -0.02 per unit of risk. If you would invest 94,493 in Vanguard International Equity on August 31, 2024 and sell it today you would earn a total of 712.00 from holding Vanguard International Equity or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard International Equity vs. ProShares Trust
Performance |
| Timeline |
| Vanguard International |
| ProShares Trust |
Vanguard International and ProShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard International and ProShares Trust
The main advantage of trading using opposite Vanguard International and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard International position performs unexpectedly, ProShares Trust 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 ProShares Trust will offset losses from the drop in ProShares Trust's long position.| Vanguard International vs. Vanguard Funds Public | Vanguard International vs. Vanguard Specialized Funds | Vanguard International vs. Vanguard World | Vanguard International vs. Vanguard Index Funds |
| ProShares Trust vs. Promotora y Operadora | ProShares Trust vs. UnitedHealth Group Incorporated | ProShares Trust vs. Qulitas Controladora SAB | ProShares Trust vs. Hoteles City Express |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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