Correlation Between Vanguard Short and SPDR DoubleLine
Can any of the company-specific risk be diversified away by investing in both Vanguard Short 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 Short 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 Short Term Bond and SPDR DoubleLine Short, you can compare the effects of market volatilities on Vanguard Short 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 Short with a short position of SPDR DoubleLine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Short and SPDR DoubleLine.
Diversification Opportunities for Vanguard Short and SPDR DoubleLine
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Vanguard and SPDR is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Short Term 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 Short 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 Short Term 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 Short i.e., Vanguard Short and SPDR DoubleLine go up and down completely randomly.
Pair Corralation between Vanguard Short and SPDR DoubleLine
Considering the 90-day investment horizon Vanguard Short Term Bond is expected to under-perform the SPDR DoubleLine. In addition to that, Vanguard Short is 1.96 times more volatile than SPDR DoubleLine Short. It trades about -0.14 of its total potential returns per unit of risk. SPDR DoubleLine Short is currently generating about -0.07 per unit of volatility. If you would invest 4,676 in SPDR DoubleLine Short on January 25, 2024 and sell it today you would lose (6.00) from holding SPDR DoubleLine Short or give up 0.13% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Vanguard Short Term Bond vs. SPDR DoubleLine Short
Performance |
Timeline |
Vanguard Short Term |
SPDR DoubleLine Short |
Vanguard Short and SPDR DoubleLine Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vanguard Short and SPDR DoubleLine
The main advantage of trading using opposite Vanguard Short and SPDR DoubleLine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Short 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 Short vs. Vanguard Intermediate Term Bond | Vanguard Short vs. Vanguard Long Term Bond | Vanguard Short vs. Vanguard Short Term Corporate | Vanguard Short vs. Vanguard Total Bond |
SPDR DoubleLine vs. SPDR DoubleLine Emerging | SPDR DoubleLine vs. SPDR SSgA Ultra | SPDR DoubleLine vs. SPDR Bloomberg 1 10 | SPDR DoubleLine vs. SPDR DoubleLine Total |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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