Correlation Between Turner Emerging and Vanguard Extended
Can any of the company-specific risk be diversified away by investing in both Turner Emerging and Vanguard Extended 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 Turner Emerging and Vanguard Extended into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turner Emerging Growth and Vanguard Extended Market, you can compare the effects of market volatilities on Turner Emerging and Vanguard Extended 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 Turner Emerging with a short position of Vanguard Extended. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turner Emerging and Vanguard Extended.
Diversification Opportunities for Turner Emerging and Vanguard Extended
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Turner and Vanguard is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Turner Emerging Growth and Vanguard Extended Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Extended Market and Turner Emerging 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 Turner Emerging Growth are associated (or correlated) with Vanguard Extended. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Extended Market has no effect on the direction of Turner Emerging i.e., Turner Emerging and Vanguard Extended go up and down completely randomly.
Pair Corralation between Turner Emerging and Vanguard Extended
Assuming the 90 days horizon Turner Emerging is expected to generate 1.06 times less return on investment than Vanguard Extended. But when comparing it to its historical volatility, Turner Emerging Growth is 1.0 times less risky than Vanguard Extended. It trades about 0.03 of its potential returns per unit of risk. Vanguard Extended Market is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 26,268 in Vanguard Extended Market on January 26, 2024 and sell it today you would earn a total of 4,820 from holding Vanguard Extended Market or generate 18.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Turner Emerging Growth vs. Vanguard Extended Market
Performance |
Timeline |
Turner Emerging Growth |
Vanguard Extended Market |
Turner Emerging and Vanguard Extended Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Turner Emerging and Vanguard Extended
The main advantage of trading using opposite Turner Emerging and Vanguard Extended positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turner Emerging position performs unexpectedly, Vanguard Extended 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 Extended will offset losses from the drop in Vanguard Extended's long position.Turner Emerging vs. HUMANA INC | Turner Emerging vs. Aquagold International | Turner Emerging vs. Barloworld Ltd ADR | Turner Emerging vs. Morningstar Unconstrained Allocation |
Vanguard Extended vs. Government Street Equity | Vanguard Extended vs. Federated Mdt Mid Cap | Vanguard Extended vs. Janus Enterprise Fund | Vanguard Extended vs. Victory Integrity Mid Cap |
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 CEOs Directory module to screen CEOs from public companies around the world.
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