Vanguard Diversified Correlations

VDEQX Fund  USD 49.18  0.69  1.38%   
The current 90-days correlation between Vanguard Diversified and Vanguard Strategic Small Cap is 0.83 (i.e., Very poor diversification). The correlation of Vanguard Diversified is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak. If the correlation is 0, the equities are not correlated; they are entirely random.

Vanguard Diversified Correlation With Market

Poor diversification

The correlation between Vanguard Diversified Equity and DJI is 0.72 (i.e., Poor diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Diversified Equity and DJI in the same portfolio, assuming nothing else is changed.
  
Check out World Market Map to better understand how to build diversified portfolios, which includes a position in Vanguard Diversified Equity. Also, note that the market value of any mutual fund could be closely tied with the direction of predictive economic indicators such as signals in producer price index.

Moving together with Vanguard Mutual Fund

  0.65VMIAX Vanguard Materials IndexPairCorr
  0.64VMNIX Vanguard Market NeutralPairCorr
  0.64VMNFX Vanguard Market NeutralPairCorr
  0.82VMVAX Vanguard Mid CapPairCorr
  0.82VMVIX Vanguard Mid CapPairCorr
  0.82VPCCX Vanguard PrimecapPairCorr
  0.73VPMCX Vanguard PrimecapPairCorr
  0.72VPMAX Vanguard PrimecapPairCorr
  0.9NAESX Vanguard Small CapPairCorr
  0.9VQNPX Vanguard Growth AndPairCorr
  0.96VSCIX Vanguard Small CapPairCorr
  0.96VSCPX Vanguard Small CapPairCorr
  0.97VSEMX Vanguard Extended MarketPairCorr
  0.96VSEQX Vanguard Strategic EquityPairCorr

Moving against Vanguard Mutual Fund

  0.47VMLUX Vanguard Limited TermPairCorr
  0.47VMLTX Vanguard Limited TermPairCorr
  0.39VMSIX Vanguard Multi SectorPairCorr
  0.38VMVFX Vanguard Global MinimumPairCorr
  0.37VMNVX Vanguard Global MinimumPairCorr
  0.36VMMSX Vanguard Emerging MarketsPairCorr
  0.53VAIPX Vanguard Inflation-protecPairCorr
  0.72VSBIX Vanguard Short TermPairCorr
  0.71VSBSX Vanguard Short TermPairCorr
  0.69VSGBX Vanguard Short TermPairCorr
  0.64VSGDX Vanguard Short TermPairCorr
  0.63VSIGX Vanguard Intermediate-terPairCorr
  0.62VSCSX Vanguard Short TermPairCorr

Related Correlations Analysis

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Correlation Matchups

Over a given time period, the two securities move together when the Correlation Coefficient is positive. Conversely, the two assets move in opposite directions when the Correlation Coefficient is negative. Determining your positions' relationship to each other is valuable for analyzing and projecting your portfolio's future expected return and risk.
High positive correlations   
VEVFXVSTCX
VEVFXVMGRX
VLACXVMGRX
VMGRXVSTCX
VLACXVEVFX
VLACXVSTCX
  
High negative correlations   
VMMSXVSTCX
VMMSXVEVFX
VMMSXVMGRX
VMMSXVLACX

Risk-Adjusted Indicators

There is a big difference between Vanguard Mutual Fund performing well and Vanguard Diversified Mutual Fund doing well as a business compared to the competition. There are so many exceptions to the norm that investors cannot definitively determine what's good or bad unless they analyze Vanguard Diversified's multiple risk-adjusted performance indicators across the competitive landscape. These indicators are quantitative in nature and help investors forecast volatility and risk-adjusted expected returns across various positions.