Correlation Between Vanguard Windsor and Catalyst/warrington

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

By analyzing existing cross correlation between Vanguard Windsor Fund and Catalystwarrington Strategic Program, you can compare the effects of market volatilities on Vanguard Windsor and Catalyst/warrington 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 Windsor with a short position of Catalyst/warrington. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Windsor and Catalyst/warrington.

Diversification Opportunities for Vanguard Windsor and Catalyst/warrington

-0.57

Correlation Coefficient

Vanguard Windsor  Catalyst/warrington

Excellent diversification

The 3 months correlation between Vanguard and Catalyst/warrington is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Windsor Fund and Catalystwarrington Strategic P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst/warrington and Vanguard Windsor 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 Windsor Fund are associated (or correlated) with Catalyst/warrington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst/warrington has no effect on the direction of Vanguard Windsor i.e., Vanguard Windsor and Catalyst/warrington go up and down completely randomly.

Pair Corralation between Vanguard Windsor and Catalyst/warrington

Assuming the 90 days horizon Vanguard Windsor Fund is expected to under-perform the Catalyst/warrington. In addition to that, Vanguard Windsor is 13.15 times more volatile than Catalystwarrington Strategic Program. It trades about -0.12 of its total potential returns per unit of risk. Catalystwarrington Strategic Program is currently generating about 0.09 per unit of volatility. If you would invest  844.00  in Catalystwarrington Strategic Program on December 2, 2024 and sell it today you would earn a total of  6.00  from holding Catalystwarrington Strategic Program or generate 0.71% return on investment over 90 days.

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

Vanguard Windsor Fund  vs.  Catalystwarrington Strategic P

Vanguard Windsor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vanguard Windsor Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Catalyst/warrington

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystwarrington Strategic Program are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Catalyst/warrington is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vanguard Windsor and Catalyst/warrington

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

The idea behind Vanguard Windsor Fund and Catalystwarrington Strategic Program 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.