Correlation Between Vanguard STAR and First Trust
Can any of the company-specific risk be diversified away by investing in both Vanguard STAR and First 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 STAR and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard STAR Funds and First Trust ETF, you can compare the effects of market volatilities on Vanguard STAR and First 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 STAR with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard STAR and First Trust.
Diversification Opportunities for Vanguard STAR and First Trust
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vanguard and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard STAR Funds and First Trust ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust ETF and Vanguard STAR 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 STAR Funds are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust ETF has no effect on the direction of Vanguard STAR i.e., Vanguard STAR and First Trust go up and down completely randomly.
Pair Corralation between Vanguard STAR and First Trust
If you would invest 124,976 in Vanguard STAR Funds on September 5, 2024 and sell it today you would earn a total of 2,009 from holding Vanguard STAR Funds or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Vanguard STAR Funds vs. First Trust ETF
Performance |
| Timeline |
| Vanguard STAR Funds |
| First Trust ETF |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Vanguard STAR and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard STAR and First Trust
The main advantage of trading using opposite Vanguard STAR and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard STAR position performs unexpectedly, First 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 First Trust will offset losses from the drop in First Trust's long position.| Vanguard STAR vs. Vanguard Funds Public | Vanguard STAR vs. Vanguard Specialized Funds | Vanguard STAR vs. Vanguard World | Vanguard STAR vs. Vanguard Index Funds |
| First Trust vs. First Trust Developed | First Trust vs. iShares Trust | First Trust vs. Vanguard Funds Public |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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