Correlation Between Vanguard Global and BetaShares Legg

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

By analyzing existing cross correlation between Vanguard Global Infrastructure and BetaShares Legg Mason, you can compare the effects of market volatilities on Vanguard Global and BetaShares Legg 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 Vanguard Global with a short position of BetaShares Legg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Global and BetaShares Legg.

Diversification Opportunities for Vanguard Global and BetaShares Legg

-0.02

Correlation Coefficient

Vanguard Global  BetaShares Legg

Good diversification

The 3 months correlation between Vanguard and BetaShares is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Global Infrastructure and BetaShares Legg Mason in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaShares Legg Mason and Vanguard Global 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 Vanguard Global Infrastructure are associated (or correlated) with BetaShares Legg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaShares Legg Mason has no effect on the direction of Vanguard Global i.e., Vanguard Global and BetaShares Legg go up and down completely randomly.

Pair Corralation between Vanguard Global and BetaShares Legg

Assuming the 90 days trading horizon Vanguard Global Infrastructure is expected to generate 1.45 times more return on investment than BetaShares Legg. However, Vanguard Global is 1.45 times more volatile than BetaShares Legg Mason. It trades about 0.0 of its potential returns per unit of risk. BetaShares Legg Mason is currently generating about -0.1 per unit of risk. If you would invest  7,327  in Vanguard Global Infrastructure on December 2, 2024 and sell it today you would lose (2.00) from holding Vanguard Global Infrastructure or give up 0.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	70.97%
Values	Daily Returns

Vanguard Global Infrastructure  vs.  BetaShares Legg Mason

Vanguard Global Infr

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vanguard Global Infrastructure has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Vanguard Global is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

BetaShares Legg Mason

Risk-Adjusted Performance

Very Weak

Over the last 90 days BetaShares Legg Mason has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BetaShares Legg is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Vanguard Global and BetaShares Legg

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

The idea behind Vanguard Global Infrastructure and BetaShares Legg Mason 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.