Vanguard Total Correlations
| VSTSX Fund | USD 240.16 3.00 1.26% |
The correlation of Vanguard Total is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Vanguard Total moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Vanguard Total Stock moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Very poor diversification
The correlation between Vanguard Total Stock and NYA is 0.88 (i.e., Very poor diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock and NYA in the same portfolio, assuming nothing else is changed.
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The ability to find closely correlated positions to Vanguard Total could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Vanguard Total when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Vanguard Total - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Vanguard Total Stock to buy it.
Moving together with Vanguard Mutual Fund
| 0.92 | VMIAX | Vanguard Materials Index | PairCorr |
| 0.71 | VMLUX | Vanguard Limited Term | PairCorr |
| 0.71 | VMLTX | Vanguard Limited Term | PairCorr |
| 0.96 | VMNVX | Vanguard Global Minimum | PairCorr |
| 0.9 | VMMSX | Vanguard Emerging Markets | PairCorr |
| 0.96 | NAESX | Vanguard Small Cap | PairCorr |
| 0.96 | VSCIX | Vanguard Small Cap | PairCorr |
| 0.96 | VSCPX | Vanguard Small Cap | PairCorr |
| 0.94 | VSEMX | Vanguard Extended Market | PairCorr |
| 0.94 | VSGAX | Vanguard Small Cap | PairCorr |
| 0.94 | VSGIX | Vanguard Small Cap | PairCorr |
| 0.96 | VSMAX | Vanguard Small Cap | PairCorr |
Related Correlations Analysis
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Be your own money manager
Our tools can tell you how much better you can do entering a position in Vanguard Total without increasing your portfolio risk or giving up the expected return. As an individual investor, you need to find a reliable way to track all your investment portfolios. However, your requirements will often be based on how much of the process you decide to do yourself. In addition to allowing all investors analytical transparency into all their portfolios, our tools can evaluate risk-adjusted returns of your individual positions relative to your overall portfolio.Did you try this?
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Already Invested in Vanguard Total Stock?
The danger of trading Vanguard Total Stock is mainly related to its market volatility and Mutual Fund specific events. As an investor, you must understand the concept of risk-adjusted return before you start trading. The most common way to measure the risk of Vanguard Total is by using the Sharpe ratio. The ratio expresses how much excess return you acquire for the extra volatility you endure for holding a more risker asset than Vanguard Total. The Sharpe ratio is calculated by using standard deviation and excess return to determine reward per unit of risk. To understand how volatile Vanguard Total Stock is, you must compare it to a benchmark. Traditionally, the risk-free rate of return is the rate of return on the shortest-dated U.S. Treasury, such as a 3-year bond.
Check out World Market Map to better understand how to build diversified portfolios, which includes a position in Vanguard Total Stock. Also, note that the market value of any mutual fund could be tightly coupled with the direction of predictive economic indicators such as signals in state. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.