Correlation Between IQ Winslow and Vanguard Growth

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

By analyzing existing cross correlation between IQ Winslow Large and Vanguard Growth Index, you can compare the effects of market volatilities on IQ Winslow and Vanguard Growth 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 IQ Winslow with a short position of Vanguard Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQ Winslow and Vanguard Growth.

Diversification Opportunities for IQ Winslow and Vanguard Growth

0.99

Correlation Coefficient

IQ Winslow  Vanguard Growth

No risk reduction

The 3 months correlation between IWLG and Vanguard is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding IQ Winslow Large and Vanguard Growth Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Growth Index and IQ Winslow 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 IQ Winslow Large are associated (or correlated) with Vanguard Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Growth Index has no effect on the direction of IQ Winslow i.e., IQ Winslow and Vanguard Growth go up and down completely randomly.

Pair Corralation between IQ Winslow and Vanguard Growth

Given the investment horizon of 90 days IQ Winslow is expected to generate 1.04 times less return on investment than Vanguard Growth. In addition to that, IQ Winslow is 1.08 times more volatile than Vanguard Growth Index. It trades about 0.21 of its total potential returns per unit of risk. Vanguard Growth Index is currently generating about 0.23 per unit of volatility. If you would invest  37,378  in Vanguard Growth Index on September 12, 2024 and sell it today you would earn a total of  5,312  from holding Vanguard Growth Index or generate 14.21% return on investment over 90 days.

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

IQ Winslow Large  vs.  Vanguard Growth Index

IQ Winslow Large

Risk-Adjusted Performance

16 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IQ Winslow Large are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, IQ Winslow reported solid returns over the last few months and may actually be approaching a breakup point.

Vanguard Growth Index

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Growth Index are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Vanguard Growth reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IQ Winslow and Vanguard Growth

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

The idea behind IQ Winslow Large and Vanguard Growth Index 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.