Correlation Between Vanguard Short and SPDR DoubleLine
Can any of the company-specific risk be diversified away by investing in both Vanguard Short and SPDR DoubleLine 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 Short and SPDR DoubleLine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Short Term Inflation Protected and SPDR DoubleLine Emerging, you can compare the effects of market volatilities on Vanguard Short and SPDR DoubleLine 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 Short with a short position of SPDR DoubleLine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Short and SPDR DoubleLine.
Diversification Opportunities for Vanguard Short and SPDR DoubleLine
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and SPDR is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Short Term Inflation and SPDR DoubleLine Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR DoubleLine Emerging and Vanguard Short 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 Short Term Inflation Protected are associated (or correlated) with SPDR DoubleLine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR DoubleLine Emerging has no effect on the direction of Vanguard Short i.e., Vanguard Short and SPDR DoubleLine go up and down completely randomly.
Pair Corralation between Vanguard Short and SPDR DoubleLine
Given the investment horizon of 90 days Vanguard Short is expected to generate 1.55 times less return on investment than SPDR DoubleLine. But when comparing it to its historical volatility, Vanguard Short Term Inflation Protected is 1.54 times less risky than SPDR DoubleLine. It trades about 0.12 of its potential returns per unit of risk. SPDR DoubleLine Emerging is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,642 in SPDR DoubleLine Emerging on September 24, 2024 and sell it today you would earn a total of 572.99 from holding SPDR DoubleLine Emerging or generate 15.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Vanguard Short Term Inflation vs. SPDR DoubleLine Emerging
Performance |
Timeline |
Vanguard Short Term |
SPDR DoubleLine Emerging |
Vanguard Short and SPDR DoubleLine Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vanguard Short and SPDR DoubleLine
The main advantage of trading using opposite Vanguard Short and SPDR DoubleLine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Short position performs unexpectedly, SPDR DoubleLine 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 SPDR DoubleLine will offset losses from the drop in SPDR DoubleLine's long position.Vanguard Short vs. PIMCO Broad TIPS | Vanguard Short vs. PIMCO 15 Year | Vanguard Short vs. SPDR FTSE International | Vanguard Short vs. FlexShares iBoxx 5 Year |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
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 | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |