Correlation Between Vanguard FTSE and Inspire Global

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

By analyzing existing cross correlation between Vanguard FTSE Emerging and Inspire Global Hope, you can compare the effects of market volatilities on Vanguard FTSE and Inspire Global 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 FTSE with a short position of Inspire Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and Inspire Global.

Diversification Opportunities for Vanguard FTSE and Inspire Global

0.59

Correlation Coefficient

Vanguard FTSE  Inspire Global

Very weak diversification

The 3 months correlation between Vanguard and Inspire is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Emerging and Inspire Global Hope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspire Global Hope and Vanguard FTSE 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 FTSE Emerging are associated (or correlated) with Inspire Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspire Global Hope has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and Inspire Global go up and down completely randomly.

Pair Corralation between Vanguard FTSE and Inspire Global

Considering the 90-day investment horizon Vanguard FTSE is expected to generate 1.07 times less return on investment than Inspire Global. In addition to that, Vanguard FTSE is 1.08 times more volatile than Inspire Global Hope. It trades about 0.06 of its total potential returns per unit of risk. Inspire Global Hope is currently generating about 0.07 per unit of volatility. If you would invest  3,146  in Inspire Global Hope on October 5, 2024 and sell it today you would earn a total of  600.00  from holding Inspire Global Hope or generate 19.07% return on investment over 90 days.

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

Vanguard FTSE Emerging  vs.  Inspire Global Hope

Vanguard FTSE Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanguard FTSE Emerging has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Inspire Global Hope

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inspire Global Hope has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Inspire Global is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Vanguard FTSE and Inspire Global

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

The idea behind Vanguard FTSE Emerging and Inspire Global Hope 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.