Correlation Between IA Clarington and Vanguard All

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

By analyzing existing cross correlation between IA Clarington Loomis and Vanguard All Equity ETF, you can compare the effects of market volatilities on IA Clarington and Vanguard All 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 IA Clarington with a short position of Vanguard All. Check out your portfolio center. Please also check ongoing floating volatility patterns of IA Clarington and Vanguard All.

Diversification Opportunities for IA Clarington and Vanguard All

0.89

Correlation Coefficient

IA Clarington  Vanguard All

Very poor diversification

The 3 months correlation between IGAF and Vanguard is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding IA Clarington Loomis and Vanguard All Equity ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard All Equity and IA Clarington 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 IA Clarington Loomis are associated (or correlated) with Vanguard All. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard All Equity has no effect on the direction of IA Clarington i.e., IA Clarington and Vanguard All go up and down completely randomly.

Pair Corralation between IA Clarington and Vanguard All

Assuming the 90 days trading horizon IA Clarington Loomis is expected to under-perform the Vanguard All. But the etf apears to be less risky and, when comparing its historical volatility, IA Clarington Loomis is 1.01 times less risky than Vanguard All. The etf trades about -0.04 of its potential returns per unit of risk. The Vanguard All Equity ETF is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  4,567  in Vanguard All Equity ETF on December 22, 2024 and sell it today you would lose (18.00) from holding Vanguard All Equity ETF or give up 0.39% of portfolio value over 90 days.

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

IA Clarington Loomis  vs.  Vanguard All Equity ETF

IA Clarington Loomis

Risk-Adjusted Performance

Very Weak

Over the last 90 days IA Clarington Loomis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, IA Clarington is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Vanguard All Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vanguard All Equity ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Vanguard All is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with IA Clarington and Vanguard All

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

The idea behind IA Clarington Loomis and Vanguard All Equity ETF 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.