Correlation Between Vanguard Short and Bondbloxx ETF

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

Diversification Opportunities for Vanguard Short and Bondbloxx ETF

0.72

Correlation Coefficient

Vanguard Short  Bondbloxx ETF

Poor diversification

The 3 months correlation between Vanguard and Bondbloxx is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Short Term Inflation and Bondbloxx ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bondbloxx ETF Trust 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 Bondbloxx ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bondbloxx ETF Trust has no effect on the direction of Vanguard Short i.e., Vanguard Short and Bondbloxx ETF go up and down completely randomly.

Pair Corralation between Vanguard Short and Bondbloxx ETF

Given the investment horizon of 90 days Vanguard Short Term Inflation Protected is expected to under-perform the Bondbloxx ETF. But the etf apears to be less risky and, when comparing its historical volatility, Vanguard Short Term Inflation Protected is 2.93 times less risky than Bondbloxx ETF. The etf trades about -0.05 of its potential returns per unit of risk. The Bondbloxx ETF Trust is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  4,201  in Bondbloxx ETF Trust on September 27, 2024 and sell it today you would earn a total of  7.00  from holding Bondbloxx ETF Trust or generate 0.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Vanguard Short Term Inflation   vs.  Bondbloxx ETF Trust

Vanguard Short Term

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanguard Short Term Inflation Protected has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, Vanguard Short is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Bondbloxx ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bondbloxx ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Bondbloxx ETF is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Vanguard Short and Bondbloxx ETF

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

The idea behind Vanguard Short Term Inflation Protected and Bondbloxx ETF Trust 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.