Correlation Between Vanguard Mid and Jacob Forward

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

By analyzing existing cross correlation between Vanguard Mid Cap Growth and Jacob Forward ETF, you can compare the effects of market volatilities on Vanguard Mid and Jacob Forward 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 Mid with a short position of Jacob Forward. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Mid and Jacob Forward.

Diversification Opportunities for Vanguard Mid and Jacob Forward

0.94

Correlation Coefficient

Vanguard Mid  Jacob Forward

Almost no diversification

The 3 months correlation between Vanguard and Jacob is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Mid Cap Growth and Jacob Forward ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacob Forward ETF and Vanguard Mid 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 Mid Cap Growth are associated (or correlated) with Jacob Forward. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacob Forward ETF has no effect on the direction of Vanguard Mid i.e., Vanguard Mid and Jacob Forward go up and down completely randomly.

Pair Corralation between Vanguard Mid and Jacob Forward

Considering the 90-day investment horizon Vanguard Mid is expected to generate 1.34 times less return on investment than Jacob Forward. But when comparing it to its historical volatility, Vanguard Mid Cap Growth is 2.27 times less risky than Jacob Forward. It trades about 0.24 of its potential returns per unit of risk. Jacob Forward ETF is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,069  in Jacob Forward ETF on September 17, 2024 and sell it today you would earn a total of  183.00  from holding Jacob Forward ETF or generate 17.12% return on investment over 90 days.

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

Vanguard Mid Cap Growth  vs.  Jacob Forward ETF

Vanguard Mid Cap

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Mid Cap Growth are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Vanguard Mid may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Jacob Forward ETF

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jacob Forward ETF are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Jacob Forward exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vanguard Mid and Jacob Forward

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

The idea behind Vanguard Mid Cap Growth and Jacob Forward ETF 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.