Correlation Between HANetf ICAV and Vanguard FTSE

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Can any of the company-specific risk be diversified away by investing in both HANetf ICAV and Vanguard FTSE 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 HANetf ICAV and Vanguard FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANetf ICAV and Vanguard FTSE All World, you can compare the effects of market volatilities on HANetf ICAV and Vanguard FTSE 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 HANetf ICAV with a short position of Vanguard FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANetf ICAV and Vanguard FTSE.

Diversification Opportunities for HANetf ICAV and Vanguard FTSE

HANetfVanguardDiversified AwayHANetfVanguardDiversified Away100%
0.95
  Correlation Coefficient

Almost no diversification

The 3 months correlation between HANetf and Vanguard is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding HANetf ICAV and Vanguard FTSE All World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard FTSE All and HANetf ICAV 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 HANetf ICAV are associated (or correlated) with Vanguard FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard FTSE All has no effect on the direction of HANetf ICAV i.e., HANetf ICAV and Vanguard FTSE go up and down completely randomly.

Pair Corralation between HANetf ICAV and Vanguard FTSE

Assuming the 90 days trading horizon HANetf ICAV is expected to generate 2.46 times more return on investment than Vanguard FTSE. However, HANetf ICAV is 2.46 times more volatile than Vanguard FTSE All World. It trades about 0.11 of its potential returns per unit of risk. Vanguard FTSE All World is currently generating about 0.1 per unit of risk. If you would invest  1,270  in HANetf ICAV on October 13, 2024 and sell it today you would earn a total of  146.00  from holding HANetf ICAV or generate 11.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

HANetf ICAV   vs.  Vanguard FTSE All World

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 5101520
JavaScript chart by amCharts 3.21.15T3KE VWCE
       Timeline  
HANetf ICAV 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in HANetf ICAV are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, HANetf ICAV may actually be approaching a critical reversion point that can send shares even higher in February 2025.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan12.51313.51414.515
Vanguard FTSE All 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard FTSE All World are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Vanguard FTSE is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan126128130132134136

HANetf ICAV and Vanguard FTSE Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.27-3.95-2.63-1.30.02211.382.84.225.657.07 0.10.20.30.40.50.60.7
JavaScript chart by amCharts 3.21.15T3KE VWCE
       Returns  

Pair Trading with HANetf ICAV and Vanguard FTSE

The main advantage of trading using opposite HANetf ICAV and Vanguard FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANetf ICAV position performs unexpectedly, Vanguard FTSE 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 FTSE will offset losses from the drop in Vanguard FTSE's long position.
The idea behind HANetf ICAV and Vanguard FTSE All World 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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