Correlation Between Vanguard FTSE and Kelly Strategic

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

By analyzing existing cross correlation between Vanguard FTSE Developed and Kelly Strategic Management, you can compare the effects of market volatilities on Vanguard FTSE and Kelly Strategic 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 FTSE with a short position of Kelly Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and Kelly Strategic.

Diversification Opportunities for Vanguard FTSE and Kelly Strategic

-0.5

Correlation Coefficient

Vanguard FTSE  Kelly Strategic

Very good diversification

The 3 months correlation between Vanguard and Kelly is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Developed and Kelly Strategic Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelly Strategic Mana and Vanguard FTSE 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 FTSE Developed are associated (or correlated) with Kelly Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kelly Strategic Mana has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and Kelly Strategic go up and down completely randomly.

Pair Corralation between Vanguard FTSE and Kelly Strategic

Considering the 90-day investment horizon Vanguard FTSE is expected to generate 2.66 times less return on investment than Kelly Strategic. But when comparing it to its historical volatility, Vanguard FTSE Developed is 1.46 times less risky than Kelly Strategic. It trades about 0.04 of its potential returns per unit of risk. Kelly Strategic Management is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,379  in Kelly Strategic Management on October 3, 2024 and sell it today you would earn a total of  139.00  from holding Kelly Strategic Management or generate 10.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	26.87%
Values	Daily Returns

Vanguard FTSE Developed  vs.  Kelly Strategic Management

Vanguard FTSE Developed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanguard FTSE Developed has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Etf's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Kelly Strategic Mana

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Vanguard FTSE and Kelly Strategic

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

The idea behind Vanguard FTSE Developed and Kelly Strategic Management 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 Stocks Directory module to find actively traded stocks across global markets.