Correlation Between Vanguard Total and ETFS Battery

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

By analyzing existing cross correlation between Vanguard Total Market and ETFS Battery Tech, you can compare the effects of market volatilities on Vanguard Total and ETFS Battery 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 Total with a short position of ETFS Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and ETFS Battery.

Diversification Opportunities for Vanguard Total and ETFS Battery

0.73

Correlation Coefficient

Vanguard Total  ETFS Battery

Poor diversification

The 3 months correlation between Vanguard and ETFS is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Market and ETFS Battery Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETFS Battery Tech and Vanguard Total 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 Total Market are associated (or correlated) with ETFS Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETFS Battery Tech has no effect on the direction of Vanguard Total i.e., Vanguard Total and ETFS Battery go up and down completely randomly.

Pair Corralation between Vanguard Total and ETFS Battery

Assuming the 90 days trading horizon Vanguard Total Market is expected to under-perform the ETFS Battery. But the etf apears to be less risky and, when comparing its historical volatility, Vanguard Total Market is 1.58 times less risky than ETFS Battery. The etf trades about -0.11 of its potential returns per unit of risk. The ETFS Battery Tech is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  8,871  in ETFS Battery Tech on December 30, 2024 and sell it today you would lose (361.00) from holding ETFS Battery Tech or give up 4.07% of portfolio value over 90 days.

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

Vanguard Total Market  vs.  ETFS Battery Tech

Vanguard Total Market

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vanguard Total Market has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Vanguard Total is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

ETFS Battery Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days ETFS Battery Tech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ETFS Battery is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Vanguard Total and ETFS Battery

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

The idea behind Vanguard Total Market and ETFS Battery Tech 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.