Correlation Between Exchange Traded and Vanguard Total

Can any of the company-specific risk be diversified away by investing in both Exchange Traded and Vanguard Total 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 Exchange Traded and Vanguard Total into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Exchange Traded Concepts and Vanguard Total Stock, you can compare the effects of market volatilities on Exchange Traded and Vanguard Total 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 Exchange Traded with a short position of Vanguard Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Traded and Vanguard Total.

Diversification Opportunities for Exchange Traded and Vanguard Total

0.59

Correlation Coefficient

Exchange Traded  Vanguard Total

Very weak diversification

The 3 months correlation between Exchange and Vanguard is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Traded Concepts and Vanguard Total Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total Stock and Exchange Traded 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 Exchange Traded Concepts are associated (or correlated) with Vanguard Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total Stock has no effect on the direction of Exchange Traded i.e., Exchange Traded and Vanguard Total go up and down completely randomly.

Pair Corralation between Exchange Traded and Vanguard Total

If you would invest  27,011  in Vanguard Total Stock on September 5, 2024 and sell it today you would earn a total of  3,032  from holding Vanguard Total Stock or generate 11.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Exchange Traded Concepts  vs.  Vanguard Total Stock

Exchange Traded Concepts

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exchange Traded Concepts has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, Exchange Traded is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Vanguard Total Stock

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Total Stock are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Vanguard Total may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Exchange Traded and Vanguard Total

The main advantage of trading using opposite Exchange Traded and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Traded position performs unexpectedly, Vanguard Total 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 Total will offset losses from the drop in Vanguard Total's long position.

The idea behind Exchange Traded Concepts and Vanguard Total Stock pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..