Correlation Between Vanguard Index and Guggenheim Styleplus

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

Diversification Opportunities for Vanguard Index and Guggenheim Styleplus

0.99
  Correlation Coefficient

No risk reduction

The 3 months correlation between Vanguard and Guggenheim is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Index Trust and Guggenheim Styleplus - in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Styleplus and Vanguard Index 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 Index Trust are associated (or correlated) with Guggenheim Styleplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Styleplus has no effect on the direction of Vanguard Index i.e., Vanguard Index and Guggenheim Styleplus go up and down completely randomly.

Pair Corralation between Vanguard Index and Guggenheim Styleplus

Assuming the 90 days horizon Vanguard Index Trust is expected to generate 1.03 times more return on investment than Guggenheim Styleplus. However, Vanguard Index is 1.03 times more volatile than Guggenheim Styleplus -. It trades about 0.33 of its potential returns per unit of risk. Guggenheim Styleplus - is currently generating about 0.32 per unit of risk. If you would invest  8,873  in Vanguard Index Trust on May 17, 2022 and sell it today you would earn a total of  1,588  from holding Vanguard Index Trust or generate 17.9% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Vanguard Index Trust  vs.  Guggenheim Styleplus -

 Performance (%) 
       Timeline  
Vanguard Index Trust 
Vanguard Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Index Trust are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Vanguard Index may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Vanguard Price Channel

Guggenheim Styleplus 
Guggenheim Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Styleplus - are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Guggenheim Styleplus is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guggenheim Price Channel

Vanguard Index and Guggenheim Styleplus Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Vanguard Index and Guggenheim Styleplus

The main advantage of trading using opposite Vanguard Index and Guggenheim Styleplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Index position performs unexpectedly, Guggenheim Styleplus 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 Guggenheim Styleplus will offset losses from the drop in Guggenheim Styleplus' long position.

Vanguard Index Trust

Pair trading matchups for Vanguard Index

The idea behind Vanguard Index Trust and Guggenheim Styleplus - 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.

Guggenheim Styleplus -

Pair trading matchups for Guggenheim Styleplus

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 Analyst Recommendations module to analyst recommendations and target price estimates broken down by several categories.

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