Correlation Between Vanguard FTSE and Leverage Shares
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE and Leverage Shares 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 Leverage Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard FTSE All World and Leverage Shares 3x, you can compare the effects of market volatilities on Vanguard FTSE and Leverage Shares 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 Leverage Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and Leverage Shares.
Diversification Opportunities for Vanguard FTSE and Leverage Shares
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vanguard and Leverage is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE All World and Leverage Shares 3x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leverage Shares 3x 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 All World are associated (or correlated) with Leverage Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leverage Shares 3x has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and Leverage Shares go up and down completely randomly.
Pair Corralation between Vanguard FTSE and Leverage Shares
Assuming the 90 days trading horizon Vanguard FTSE All World is expected to generate 0.06 times more return on investment than Leverage Shares. However, Vanguard FTSE All World is 16.3 times less risky than Leverage Shares. It trades about 0.13 of its potential returns per unit of risk. Leverage Shares 3x is currently generating about -0.11 per unit of risk. If you would invest 9,968 in Vanguard FTSE All World on September 12, 2024 and sell it today you would earn a total of 3,556 from holding Vanguard FTSE All World or generate 35.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 44.74% |
| Values | Daily Returns |
Vanguard FTSE All World vs. Leverage Shares 3x
Performance |
| Timeline |
| Vanguard FTSE All |
| Leverage Shares 3x |
Vanguard FTSE and Leverage Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and Leverage Shares
The main advantage of trading using opposite Vanguard FTSE and Leverage Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE position performs unexpectedly, Leverage Shares 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 Leverage Shares will offset losses from the drop in Leverage Shares' long position.| Vanguard FTSE vs. SPDR Dow Jones | Vanguard FTSE vs. iShares Core MSCI | Vanguard FTSE vs. iShares SP 500 | Vanguard FTSE vs. iShares Core MSCI |
| Leverage Shares vs. Vanguard SP 500 | Leverage Shares vs. SPDR Dow Jones | Leverage Shares vs. iShares Core MSCI | Leverage Shares vs. iShares SP 500 |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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