Correlation Between Vanguard FTSE and Strategy Shares

Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE and Strategy Shares 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 Strategy Shares 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 Strategy Shares, you can compare the effects of market volatilities on Vanguard FTSE and Strategy Shares 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 Strategy Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and Strategy Shares.

Diversification Opportunities for Vanguard FTSE and Strategy Shares

0.0

Correlation Coefficient

Vanguard FTSE  Strategy Shares

Pay attention - limited upside

The 3 months correlation between Vanguard and Strategy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Developed and Strategy Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategy Shares 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 Strategy Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategy Shares has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and Strategy Shares go up and down completely randomly.

Pair Corralation between Vanguard FTSE and Strategy Shares

If you would invest  4,785  in Vanguard FTSE Developed on December 21, 2024 and sell it today you would earn a total of  473.00  from holding Vanguard FTSE Developed or generate 9.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Vanguard FTSE Developed  vs.  Strategy Shares

Vanguard FTSE Developed

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard FTSE Developed are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, Vanguard FTSE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Strategy Shares

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Vanguard FTSE and Strategy Shares

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

The idea behind Vanguard FTSE Developed and Strategy Shares 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.