Correlation Between Listed Funds and Vanguard Total

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Can any of the company-specific risk be diversified away by investing in both Listed Funds 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 Listed Funds and Vanguard Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Listed Funds Trust and Vanguard Total Stock, you can compare the effects of market volatilities on Listed Funds 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 Listed Funds with a short position of Vanguard Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Listed Funds and Vanguard Total.

Diversification Opportunities for Listed Funds and Vanguard Total

0.93
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Listed and Vanguard is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Listed Funds Trust 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 Listed Funds 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 Listed Funds Trust 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 Listed Funds i.e., Listed Funds and Vanguard Total go up and down completely randomly.

Pair Corralation between Listed Funds and Vanguard Total

Considering the 90-day investment horizon Listed Funds is expected to generate 9.06 times less return on investment than Vanguard Total. But when comparing it to its historical volatility, Listed Funds Trust is 2.73 times less risky than Vanguard Total. It trades about 0.08 of its potential returns per unit of risk. Vanguard Total Stock is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  25,064  in Vanguard Total Stock on December 30, 2023 and sell it today you would earn a total of  926.00  from holding Vanguard Total Stock or generate 3.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Listed Funds Trust  vs.  Vanguard Total Stock

 Performance 
       Timeline  
Listed Funds Trust 

Risk-Adjusted Performance

12 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Listed Funds Trust are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Listed Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Vanguard Total Stock 

Risk-Adjusted Performance

18 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Total Stock are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Vanguard Total may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Listed Funds and Vanguard Total Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Listed Funds and Vanguard Total

The main advantage of trading using opposite Listed Funds and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Listed Funds 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.
The idea behind Listed Funds Trust and Vanguard Total Stock pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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