diversifiable risk of combining Vanguard Long and Vanguard ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Long Term Corporate and Vanguard ESG US, you can compare the effects of market volatilities on Vanguard Long and Vanguard ESG 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 Long with a short position of Vanguard ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Long and Vanguard ESG.
Diversification Opportunities for Vanguard Long and Vanguard ESG
Pair Corralation between Vanguard Long and Vanguard ESG
Given the investment horizon of 90 days Vanguard Long Term Corporate is expected to generate 1.84 times more return on investment than Vanguard ESG. However, Vanguard Long is 1.84 times more volatile than Vanguard ESG US. It trades about 0.09 of its potential returns per unit of risk. Vanguard ESG US is currently generating about 0.1 per unit of risk. If you would invest 7,388 in Vanguard Long Term Corporate on November 24, 2023 and sell it today you would earn a total of 311.00 from holding Vanguard Long Term Corporate or generate 4.21% return on investment over 90 days.
Vanguard Long-Term Corporate vs. Vanguard ESG US
Vanguard Long and Vanguard ESG Volatility Contrast
Pair Trading with Vanguard Long and Vanguard ESGThe main advantage of trading using opposite Vanguard Long and Vanguard ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Long position performs unexpectedly, Vanguard ESG 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 ESG will offset losses from the drop in Vanguard ESG's long position. The idea behind Vanguard Long Term Corporate and Vanguard ESG US 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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