Correlation Between Aptus Defined and Vanguard Intermediate

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

By analyzing existing cross correlation between Aptus Defined Risk and Vanguard Intermediate Term Bond, you can compare the effects of market volatilities on Aptus Defined and Vanguard Intermediate 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 Aptus Defined with a short position of Vanguard Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptus Defined and Vanguard Intermediate.

Diversification Opportunities for Aptus Defined and Vanguard Intermediate

0.69

Correlation Coefficient

Aptus Defined  Vanguard Intermediate

Poor diversification

The 3 months correlation between Aptus and Vanguard is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Aptus Defined Risk and Vanguard Intermediate Term Bon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Intermediate and Aptus Defined 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 Aptus Defined Risk are associated (or correlated) with Vanguard Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Intermediate has no effect on the direction of Aptus Defined i.e., Aptus Defined and Vanguard Intermediate go up and down completely randomly.

Pair Corralation between Aptus Defined and Vanguard Intermediate

Given the investment horizon of 90 days Aptus Defined Risk is expected to generate 1.12 times more return on investment than Vanguard Intermediate. However, Aptus Defined is 1.12 times more volatile than Vanguard Intermediate Term Bond. It trades about 0.07 of its potential returns per unit of risk. Vanguard Intermediate Term Bond is currently generating about 0.04 per unit of risk. If you would invest  2,422  in Aptus Defined Risk on September 19, 2024 and sell it today you would earn a total of  395.00  from holding Aptus Defined Risk or generate 16.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Aptus Defined Risk  vs.  Vanguard Intermediate Term Bon

Aptus Defined Risk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aptus Defined Risk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Aptus Defined is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Vanguard Intermediate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanguard Intermediate Term Bond has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, Vanguard Intermediate is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Aptus Defined and Vanguard Intermediate

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

The idea behind Aptus Defined Risk and Vanguard Intermediate Term Bond 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 CEOs Directory module to screen CEOs from public companies around the world.