Correlation Between Vanguard Value and Lesico
Can any of the company-specific risk be diversified away by investing in both Vanguard Value and Lesico 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 Value and Lesico into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Value Index and Lesico, you can compare the effects of market volatilities on Vanguard Value and Lesico 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 Value with a short position of Lesico. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Value and Lesico.
Diversification Opportunities for Vanguard Value and Lesico
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Lesico is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Value Index and Lesico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lesico and Vanguard Value 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 Value Index are associated (or correlated) with Lesico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lesico has no effect on the direction of Vanguard Value i.e., Vanguard Value and Lesico go up and down completely randomly.
Pair Corralation between Vanguard Value and Lesico
Considering the 90-day investment horizon Vanguard Value Index is expected to under-perform the Lesico. But the etf apears to be less risky and, when comparing its historical volatility, Vanguard Value Index is 4.19 times less risky than Lesico. The etf trades about -0.22 of its potential returns per unit of risk. The Lesico is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 31,700 in Lesico on January 20, 2024 and sell it today you would earn a total of 1,510 from holding Lesico or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 82.61% |
| Values | Daily Returns |
Vanguard Value Index vs. Lesico
Performance |
| Timeline |
| Vanguard Value Index |
| Lesico |
Vanguard Value and Lesico Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Value and Lesico
The main advantage of trading using opposite Vanguard Value and Lesico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Value position performs unexpectedly, Lesico 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 Lesico will offset losses from the drop in Lesico's long position.| Vanguard Value vs. Vanguard Growth Index | Vanguard Value vs. Vanguard Small Cap Value | Vanguard Value vs. Vanguard Mid Cap Value | Vanguard Value vs. Vanguard Small Cap Index |
| Lesico vs. EN Shoham Business | Lesico vs. Accel Solutions Group | Lesico vs. Mivtach Shamir | Lesico vs. Rani Zim Shopping |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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