Correlation Between Vanguard Value and Tuttle Capital

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

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

Diversification Opportunities for Vanguard Value and Tuttle Capital

-0.05

Correlation Coefficient

Vanguard Value  Tuttle Capital

Good diversification

The 3 months correlation between Vanguard and Tuttle is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Value Index and Tuttle Capital Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tuttle Capital Short and Vanguard Value 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 Value Index are associated (or correlated) with Tuttle Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tuttle Capital Short has no effect on the direction of Vanguard Value i.e., Vanguard Value and Tuttle Capital go up and down completely randomly.

Pair Corralation between Vanguard Value and Tuttle Capital

Considering the 90-day investment horizon Vanguard Value Index is expected to generate 0.13 times more return on investment than Tuttle Capital. However, Vanguard Value Index is 7.48 times less risky than Tuttle Capital. It trades about -0.02 of its potential returns per unit of risk. Tuttle Capital Short is currently generating about -0.01 per unit of risk. If you would invest  17,962  in Vanguard Value Index on December 1, 2024 and sell it today you would lose (149.00) from holding Vanguard Value Index or give up 0.83% of portfolio value over 90 days.

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

Vanguard Value Index  vs.  Tuttle Capital Short

Vanguard Value Index

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vanguard Value Index has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Vanguard Value is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Tuttle Capital Short

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tuttle Capital Short has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Tuttle Capital is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Vanguard Value and Tuttle Capital

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

The idea behind Vanguard Value Index and Tuttle Capital Short 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..