Correlation Between Vanguard 500 and Performance Trust

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Vanguard 500 and Performance Trust 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 500 and Performance Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard 500 Index and Performance Trust Strategic, you can compare the effects of market volatilities on Vanguard 500 and Performance Trust 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 500 with a short position of Performance Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard 500 and Performance Trust.

Diversification Opportunities for Vanguard 500 and Performance Trust

-0.66
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Vanguard and Performance is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard 500 Index and Performance Trust Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Trust and Vanguard 500 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 500 Index are associated (or correlated) with Performance Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Trust has no effect on the direction of Vanguard 500 i.e., Vanguard 500 and Performance Trust go up and down completely randomly.

Pair Corralation between Vanguard 500 and Performance Trust

Assuming the 90 days horizon Vanguard 500 Index is expected to generate 2.35 times more return on investment than Performance Trust. However, Vanguard 500 is 2.35 times more volatile than Performance Trust Strategic. It trades about 0.22 of its potential returns per unit of risk. Performance Trust Strategic is currently generating about -0.04 per unit of risk. If you would invest  50,734  in Vanguard 500 Index on September 5, 2024 and sell it today you would earn a total of  5,188  from holding Vanguard 500 Index or generate 10.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Vanguard 500 Index  vs.  Performance Trust Strategic

 Performance 
       Timeline  
Vanguard 500 Index 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard 500 Index are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vanguard 500 may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Performance Trust 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Performance Trust Strategic has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Performance Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vanguard 500 and Performance Trust Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Vanguard 500 and Performance Trust

The main advantage of trading using opposite Vanguard 500 and Performance Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard 500 position performs unexpectedly, Performance Trust 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 Performance Trust will offset losses from the drop in Performance Trust's long position.
The idea behind Vanguard 500 Index and Performance Trust Strategic 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

Other Complementary Tools

CEOs Directory
Screen CEOs from public companies around the world
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments