Correlation Between Vanguard Extended and Fisher Investments

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

By analyzing existing cross correlation between Vanguard Extended Market and Fisher Esg Stock, you can compare the effects of market volatilities on Vanguard Extended and Fisher Investments 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 Extended with a short position of Fisher Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Extended and Fisher Investments.

Diversification Opportunities for Vanguard Extended and Fisher Investments

0.87

Correlation Coefficient

Vanguard Extended  Fisher Investments

Very poor diversification

The 3 months correlation between VANGUARD and Fisher is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Extended Market and Fisher Esg Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fisher Investments and Vanguard Extended 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 Extended Market are associated (or correlated) with Fisher Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fisher Investments has no effect on the direction of Vanguard Extended i.e., Vanguard Extended and Fisher Investments go up and down completely randomly.

Pair Corralation between Vanguard Extended and Fisher Investments

Assuming the 90 days horizon Vanguard Extended Market is expected to generate 1.33 times more return on investment than Fisher Investments. However, Vanguard Extended is 1.33 times more volatile than Fisher Esg Stock. It trades about 0.04 of its potential returns per unit of risk. Fisher Esg Stock is currently generating about 0.03 per unit of risk. If you would invest  36,552  in Vanguard Extended Market on November 19, 2024 and sell it today you would earn a total of  814.00  from holding Vanguard Extended Market or generate 2.23% return on investment over 90 days.

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

Vanguard Extended Market  vs.  Fisher Esg Stock

Vanguard Extended Market

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Extended Market are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Vanguard Extended is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fisher Investments

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fisher Esg Stock are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fisher Investments is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vanguard Extended and Fisher Investments

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

The idea behind Vanguard Extended Market and Fisher Esg Stock 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.