Correlation Between Vanguard Total and SPDR DoubleLine
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and SPDR DoubleLine 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 Total and SPDR DoubleLine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Bond and SPDR DoubleLine Short, you can compare the effects of market volatilities on Vanguard Total and SPDR DoubleLine 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 Total with a short position of SPDR DoubleLine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and SPDR DoubleLine.
Diversification Opportunities for Vanguard Total and SPDR DoubleLine
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vanguard and SPDR is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Bond and SPDR DoubleLine Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR DoubleLine Short and Vanguard Total 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 Total Bond are associated (or correlated) with SPDR DoubleLine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR DoubleLine Short has no effect on the direction of Vanguard Total i.e., Vanguard Total and SPDR DoubleLine go up and down completely randomly.
Pair Corralation between Vanguard Total and SPDR DoubleLine
Considering the 90-day investment horizon Vanguard Total Bond is expected to under-perform the SPDR DoubleLine. In addition to that, Vanguard Total is 4.21 times more volatile than SPDR DoubleLine Short. It trades about -0.01 of its total potential returns per unit of risk. SPDR DoubleLine Short is currently generating about 0.2 per unit of volatility. If you would invest 4,442 in SPDR DoubleLine Short on January 20, 2024 and sell it today you would earn a total of 224.00 from holding SPDR DoubleLine Short or generate 5.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total Bond vs. SPDR DoubleLine Short
Performance |
| Timeline |
| Vanguard Total Bond |
| SPDR DoubleLine Short |
Vanguard Total and SPDR DoubleLine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and SPDR DoubleLine
The main advantage of trading using opposite Vanguard Total and SPDR DoubleLine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, SPDR DoubleLine 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 SPDR DoubleLine will offset losses from the drop in SPDR DoubleLine's long position.| Vanguard Total vs. Vanguard Short Term Bond | Vanguard Total vs. Vanguard Long Term Bond | Vanguard Total vs. Vanguard Intermediate Term Corporate | Vanguard Total vs. Vanguard Short Term Corporate |
| SPDR DoubleLine vs. Vanguard Intermediate Term Bond | SPDR DoubleLine vs. Vanguard Long Term Bond | SPDR DoubleLine vs. Vanguard Total Bond | SPDR DoubleLine vs. Vanguard Intermediate Term Corporate |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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