Correlation Between Vanguard Growth and Exchange Traded

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Can any of the company-specific risk be diversified away by investing in both Vanguard Growth and Exchange Traded 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 Growth and Exchange Traded into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Growth Index and Exchange Traded Concepts, you can compare the effects of market volatilities on Vanguard Growth and Exchange Traded 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 Growth with a short position of Exchange Traded. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Growth and Exchange Traded.

Diversification Opportunities for Vanguard Growth and Exchange Traded

-0.82
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Vanguard and Exchange is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Growth Index and Exchange Traded Concepts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Traded Concepts and Vanguard Growth 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 Growth Index are associated (or correlated) with Exchange Traded. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Traded Concepts has no effect on the direction of Vanguard Growth i.e., Vanguard Growth and Exchange Traded go up and down completely randomly.

Pair Corralation between Vanguard Growth and Exchange Traded

If you would invest  36,354  in Vanguard Growth Index on October 3, 2024 and sell it today you would earn a total of  5,065  from holding Vanguard Growth Index or generate 13.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy1.19%
ValuesDaily Returns

Vanguard Growth Index  vs.  Exchange Traded Concepts

 Performance 
       Timeline  
Vanguard Growth Index 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Growth Index are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Vanguard Growth may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Exchange Traded Concepts 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Exchange Traded Concepts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Exchange Traded is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vanguard Growth and Exchange Traded Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Vanguard Growth and Exchange Traded

The main advantage of trading using opposite Vanguard Growth and Exchange Traded positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Growth position performs unexpectedly, Exchange Traded 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 Exchange Traded will offset losses from the drop in Exchange Traded's long position.
The idea behind Vanguard Growth Index and Exchange Traded Concepts 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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