Correlation Between Vanguard High and IShares Thematic
Can any of the company-specific risk be diversified away by investing in both Vanguard High and IShares Thematic 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 IShares Thematic 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 iShares Thematic Rotation, you can compare the effects of market volatilities on Vanguard High and IShares Thematic 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 IShares Thematic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard High and IShares Thematic.
Diversification Opportunities for Vanguard High and IShares Thematic
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and IShares is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard High Dividend and iShares Thematic Rotation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Thematic Rotation 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 IShares Thematic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Thematic Rotation has no effect on the direction of Vanguard High i.e., Vanguard High and IShares Thematic go up and down completely randomly.
Pair Corralation between Vanguard High and IShares Thematic
Considering the 90-day investment horizon Vanguard High Dividend is expected to under-perform the IShares Thematic. But the etf apears to be less risky and, when comparing its historical volatility, Vanguard High Dividend is 1.38 times less risky than IShares Thematic. The etf trades about -0.07 of its potential returns per unit of risk. The iShares Thematic Rotation is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,441 in iShares Thematic Rotation on September 13, 2024 and sell it today you would earn a total of 52.00 from holding iShares Thematic Rotation or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard High Dividend vs. iShares Thematic Rotation
Performance |
| Timeline |
| Vanguard High Dividend |
| iShares Thematic Rotation |
Vanguard High and IShares Thematic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard High and IShares Thematic
The main advantage of trading using opposite Vanguard High and IShares Thematic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard High position performs unexpectedly, IShares Thematic 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 IShares Thematic will offset losses from the drop in IShares Thematic's 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 |
| IShares Thematic vs. Vanguard SP 500 | IShares Thematic vs. Vanguard Real Estate | IShares Thematic vs. Vanguard Total Bond | IShares Thematic vs. Vanguard High Dividend |
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 Stocks Directory module to find actively traded stocks across global markets.
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