Correlation Between BFIT and Vanguard Total
Can any of the company-specific risk be diversified away by investing in both BFIT and Vanguard Total 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 BFIT and Vanguard Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BFIT and Vanguard Total Stock, you can compare the effects of market volatilities on BFIT and Vanguard Total 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 BFIT with a short position of Vanguard Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of BFIT and Vanguard Total.
Diversification Opportunities for BFIT and Vanguard Total
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BFIT and Vanguard is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding BFIT and Vanguard Total Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total Stock and BFIT 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 BFIT are associated (or correlated) with Vanguard Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total Stock has no effect on the direction of BFIT i.e., BFIT and Vanguard Total go up and down completely randomly.
Pair Corralation between BFIT and Vanguard Total
If you would invest 2,139 in BFIT on January 20, 2024 and sell it today you would earn a total of 0.00 from holding BFIT or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
BFIT vs. Vanguard Total Stock
Performance |
| Timeline |
| BFIT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Vanguard Total Stock |
BFIT and Vanguard Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BFIT and Vanguard Total
The main advantage of trading using opposite BFIT and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BFIT position performs unexpectedly, Vanguard Total 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 Vanguard Total will offset losses from the drop in Vanguard Total's long position.| BFIT vs. ProShares Global Listed | BFIT vs. Invesco Dynamic Building | BFIT vs. Invesco Dynamic Large | BFIT vs. HUMANA INC |
| Vanguard Total vs. Dimensional Targeted Value | Vanguard Total vs. Dimensional World ex | Vanguard Total vs. Dimensional Small Cap |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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