Correlation Between Vanguard International and Mutual Of

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

By analyzing existing cross correlation between Vanguard International Value and Mutual Of America, you can compare the effects of market volatilities on Vanguard International and Mutual Of 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 International with a short position of Mutual Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard International and Mutual Of.

Diversification Opportunities for Vanguard International and Mutual Of

0.85

Correlation Coefficient

Vanguard International  Mutual Of

Very poor diversification

The 3 months correlation between Vanguard and Mutual is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard International Value and Mutual Of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mutual Of America and Vanguard International 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 International Value are associated (or correlated) with Mutual Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mutual Of America has no effect on the direction of Vanguard International i.e., Vanguard International and Mutual Of go up and down completely randomly.

Pair Corralation between Vanguard International and Mutual Of

Assuming the 90 days horizon Vanguard International is expected to generate 1.42 times less return on investment than Mutual Of. In addition to that, Vanguard International is 1.02 times more volatile than Mutual Of America. It trades about 0.16 of its total potential returns per unit of risk. Mutual Of America is currently generating about 0.23 per unit of volatility. If you would invest  833.00  in Mutual Of America on December 21, 2024 and sell it today you would earn a total of  100.00  from holding Mutual Of America or generate 12.0% return on investment over 90 days.

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

Vanguard International Value  vs.  Mutual Of America

Vanguard International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard International Value are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Vanguard International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Mutual Of America

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mutual Of America are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Mutual Of may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Vanguard International and Mutual Of

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

The idea behind Vanguard International Value and Mutual Of America 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.