Correlation Between ZKB Silver and Vanguard
Can any of the company-specific risk be diversified away by investing in both ZKB Silver and Vanguard 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 ZKB Silver and Vanguard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZKB Silver ETF and Vanguard SP 500, you can compare the effects of market volatilities on ZKB Silver and Vanguard 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 ZKB Silver with a short position of Vanguard. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZKB Silver and Vanguard.
Diversification Opportunities for ZKB Silver and Vanguard
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ZKB and Vanguard is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding ZKB Silver ETF and Vanguard SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard SP 500 and ZKB Silver 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 ZKB Silver ETF are associated (or correlated) with Vanguard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard SP 500 has no effect on the direction of ZKB Silver i.e., ZKB Silver and Vanguard go up and down completely randomly.
Pair Corralation between ZKB Silver and Vanguard
Assuming the 90 days trading horizon ZKB Silver is expected to generate 1.3 times less return on investment than Vanguard. In addition to that, ZKB Silver is 2.01 times more volatile than Vanguard SP 500. It trades about 0.04 of its total potential returns per unit of risk. Vanguard SP 500 is currently generating about 0.11 per unit of volatility. If you would invest 7,315 in Vanguard SP 500 on September 3, 2024 and sell it today you would earn a total of 2,793 from holding Vanguard SP 500 or generate 38.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZKB Silver ETF vs. Vanguard SP 500
Performance |
| Timeline |
| ZKB Silver ETF |
| Vanguard SP 500 |
ZKB Silver and Vanguard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZKB Silver and Vanguard
The main advantage of trading using opposite ZKB Silver and Vanguard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZKB Silver position performs unexpectedly, Vanguard 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 Vanguard will offset losses from the drop in Vanguard's long position.| ZKB Silver vs. UBSFund Solutions MSCI | ZKB Silver vs. Vanguard SP 500 | ZKB Silver vs. iShares VII PLC | ZKB Silver vs. iShares Core SP |
| Vanguard vs. Vanguard FTSE Emerging | Vanguard vs. Vanguard USD Emerging | Vanguard vs. Vanguard FTSE Developed | Vanguard vs. Vanguard FTSE Japan |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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