Correlation Between Vanguard Extended and Burney Factor
Can any of the company-specific risk be diversified away by investing in both Vanguard Extended and Burney Factor 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 Extended and Burney Factor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Extended Market and Burney Factor Rotation, you can compare the effects of market volatilities on Vanguard Extended and Burney Factor 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 Extended with a short position of Burney Factor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Extended and Burney Factor.
Diversification Opportunities for Vanguard Extended and Burney Factor
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and Burney is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Extended Market and Burney Factor Rotation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burney Factor Rotation and Vanguard Extended 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 Extended Market are associated (or correlated) with Burney Factor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burney Factor Rotation has no effect on the direction of Vanguard Extended i.e., Vanguard Extended and Burney Factor go up and down completely randomly.
Pair Corralation between Vanguard Extended and Burney Factor
Considering the 90-day investment horizon Vanguard Extended Market is expected to generate 1.29 times more return on investment than Burney Factor. However, Vanguard Extended is 1.29 times more volatile than Burney Factor Rotation. It trades about 0.36 of its potential returns per unit of risk. Burney Factor Rotation is currently generating about 0.31 per unit of risk. If you would invest 18,567 in Vanguard Extended Market on August 28, 2024 and sell it today you would earn a total of 2,037 from holding Vanguard Extended Market or generate 10.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Extended Market vs. Burney Factor Rotation
Performance |
| Timeline |
| Vanguard Extended Market |
| Burney Factor Rotation |
Vanguard Extended and Burney Factor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Extended and Burney Factor
The main advantage of trading using opposite Vanguard Extended and Burney Factor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Extended position performs unexpectedly, Burney Factor 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 Burney Factor will offset losses from the drop in Burney Factor's long position.| Vanguard Extended vs. Vanguard Mid Cap Index | Vanguard Extended vs. iShares Core SP | Vanguard Extended vs. SPDR SP MIDCAP | Vanguard Extended vs. First Trust Dorsey |
| Burney Factor vs. Invesco BulletShares 2030 | Burney Factor vs. Invesco BulletShares 2025 | Burney Factor vs. Invesco BulletShares 2024 |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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