diversifiable risk of combining Vanguard ESG and Vanguard Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard ESG US and Vanguard Intermediate Term Corporate, you can compare the effects of market volatilities on Vanguard ESG and Vanguard Intermediate 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 ESG with a short position of Vanguard Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard ESG and Vanguard Intermediate.
Diversification Opportunities for Vanguard ESG and Vanguard Intermediate
Pair Corralation between Vanguard ESG and Vanguard Intermediate
Given the investment horizon of 90 days Vanguard ESG US is expected to generate 0.88 times more return on investment than Vanguard Intermediate. However, Vanguard ESG US is 1.14 times less risky than Vanguard Intermediate. It trades about -0.09 of its potential returns per unit of risk. Vanguard Intermediate Term Corporate is currently generating about -0.08 per unit of risk. If you would invest 6,273 in Vanguard ESG US on November 24, 2023 and sell it today you would lose (47.00) from holding Vanguard ESG US or give up 0.75% of portfolio value over 90 days.
Vanguard ESG US vs. Vanguard Intermediate-Term Cor
Vanguard ESG and Vanguard Intermediate Volatility Contrast
Pair Trading with Vanguard ESG and Vanguard IntermediateThe main advantage of trading using opposite Vanguard ESG and Vanguard Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard ESG position performs unexpectedly, Vanguard Intermediate 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 Intermediate will offset losses from the drop in Vanguard Intermediate's long position. The idea behind Vanguard ESG US and Vanguard Intermediate Term Corporate 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.
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
|Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Use Commodity Channel Index to analyze current equity momentum
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
View fundamental data based on most recent published financial statements
Check basic technical indicators and analysis based on most latest market data
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
|AI Investment Finder
Use AI to screen and filter profitable investment opportunities
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites