Correlation Between Vanguard International and Vanguard Total
Can any of the company-specific risk be diversified away by investing in both Vanguard International 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 Vanguard International and Vanguard Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard International Growth and Vanguard Total Stock, you can compare the effects of market volatilities on Vanguard International 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 Vanguard International with a short position of Vanguard Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard International and Vanguard Total.
Diversification Opportunities for Vanguard International and Vanguard Total
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Vanguard is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard International Growth 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 Vanguard International 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 International Growth 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 Vanguard International i.e., Vanguard International and Vanguard Total go up and down completely randomly.
Pair Corralation between Vanguard International and Vanguard Total
Assuming the 90 days horizon Vanguard International Growth is expected to generate 1.42 times more return on investment than Vanguard Total. However, Vanguard International is 1.42 times more volatile than Vanguard Total Stock. It trades about 0.02 of its potential returns per unit of risk. Vanguard Total Stock is currently generating about -0.08 per unit of risk. If you would invest 10,747 in Vanguard International Growth on February 6, 2024 and sell it today you would earn a total of 50.00 from holding Vanguard International Growth or generate 0.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Vanguard International Growth vs. Vanguard Total Stock
Performance |
Timeline |
Vanguard International |
Vanguard Total Stock |
Vanguard International and Vanguard Total Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vanguard International and Vanguard Total
The main advantage of trading using opposite Vanguard International and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard International 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.Vanguard International vs. Vanguard Explorer Fund | Vanguard International vs. Vanguard Windsor Ii | Vanguard International vs. Vanguard Growth Fund | Vanguard International vs. Vanguard Wellington Fund |
Vanguard Total vs. Vanguard Total Bond | Vanguard Total vs. Vanguard Small Cap Index | Vanguard Total vs. Vanguard Mid Cap Index | Vanguard Total vs. Vanguard Extended Market |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Transaction History View history of all your transactions and understand their impact on performance | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |