Correlation Between Vanguard High and ETF Series
Can any of the company-specific risk be diversified away by investing in both Vanguard High and ETF Series 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 High and ETF Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard High Dividend and ETF Series Solutions, you can compare the effects of market volatilities on Vanguard High and ETF Series 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 High with a short position of ETF Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard High and ETF Series.
Diversification Opportunities for Vanguard High and ETF Series
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vanguard and ETF is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard High Dividend and ETF Series Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Series Solutions and Vanguard High 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 High Dividend are associated (or correlated) with ETF Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Series Solutions has no effect on the direction of Vanguard High i.e., Vanguard High and ETF Series go up and down completely randomly.
Pair Corralation between Vanguard High and ETF Series
Considering the 90-day investment horizon Vanguard High Dividend is expected to generate 1.24 times more return on investment than ETF Series. However, Vanguard High is 1.24 times more volatile than ETF Series Solutions. It trades about 0.32 of its potential returns per unit of risk. ETF Series Solutions is currently generating about 0.22 per unit of risk. If you would invest 12,778 in Vanguard High Dividend on September 1, 2024 and sell it today you would earn a total of 696.00 from holding Vanguard High Dividend or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vanguard High Dividend vs. ETF Series Solutions
Performance |
| Timeline |
| Vanguard High Dividend |
| ETF Series Solutions |
Vanguard High and ETF Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard High and ETF Series
The main advantage of trading using opposite Vanguard High and ETF Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard High position performs unexpectedly, ETF Series 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 ETF Series will offset losses from the drop in ETF Series' long position.| Vanguard High vs. Vanguard Dividend Appreciation | Vanguard High vs. Schwab Dividend Equity | Vanguard High vs. Vanguard Real Estate | Vanguard High vs. Vanguard Total Stock |
| ETF Series vs. iShares Core SP | ETF Series vs. iShares Core MSCI | ETF Series vs. iShares Broad USD | ETF Series vs. iShares Core SP |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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