Correlation Between Vanguard FTSE and Barclays Capital
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE and Barclays Capital 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 Barclays Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard FTSE Emerging and Barclays Capital, you can compare the effects of market volatilities on Vanguard FTSE and Barclays Capital 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 Barclays Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and Barclays Capital.
Diversification Opportunities for Vanguard FTSE and Barclays Capital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vanguard and Barclays is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Emerging and Barclays Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays Capital 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 Emerging are associated (or correlated) with Barclays Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays Capital has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and Barclays Capital go up and down completely randomly.
Pair Corralation between Vanguard FTSE and Barclays Capital
Considering the 90-day investment horizon Vanguard FTSE Emerging is expected to generate 0.55 times more return on investment than Barclays Capital. However, Vanguard FTSE Emerging is 1.82 times less risky than Barclays Capital. It trades about 0.04 of its potential returns per unit of risk. Barclays Capital is currently generating about 0.01 per unit of risk. If you would invest 3,794 in Vanguard FTSE Emerging on September 3, 2024 and sell it today you would earn a total of 763.00 from holding Vanguard FTSE Emerging or generate 20.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 30.71% |
| Values | Daily Returns |
Vanguard FTSE Emerging vs. Barclays Capital
Performance |
| Timeline |
| Vanguard FTSE Emerging |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Vanguard FTSE and Barclays Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and Barclays Capital
The main advantage of trading using opposite Vanguard FTSE and Barclays Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE position performs unexpectedly, Barclays Capital 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 Barclays Capital will offset losses from the drop in Barclays Capital's long position.| Vanguard FTSE vs. Vanguard FTSE Developed | Vanguard FTSE vs. Vanguard Real Estate | Vanguard FTSE vs. Vanguard Small Cap Index | Vanguard FTSE vs. Vanguard Total Stock |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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