Correlation Between Osterweis Strategic and Vanguard Dividend

Can any of the company-specific risk be diversified away by investing in both Osterweis Strategic and Vanguard Dividend 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 Osterweis Strategic and Vanguard Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Osterweis Strategic Income and Vanguard Dividend Growth, you can compare the effects of market volatilities on Osterweis Strategic and Vanguard Dividend 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 Osterweis Strategic with a short position of Vanguard Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osterweis Strategic and Vanguard Dividend.

Diversification Opportunities for Osterweis Strategic and Vanguard Dividend

-0.24

Correlation Coefficient

Osterweis Strategic  Vanguard Dividend

Very good diversification

The 3 months correlation between Osterweis and Vanguard is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Osterweis Strategic Income and Vanguard Dividend Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Dividend Growth and Osterweis Strategic 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 Osterweis Strategic Income are associated (or correlated) with Vanguard Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Dividend Growth has no effect on the direction of Osterweis Strategic i.e., Osterweis Strategic and Vanguard Dividend go up and down completely randomly.

Pair Corralation between Osterweis Strategic and Vanguard Dividend

Assuming the 90 days horizon Osterweis Strategic is expected to generate 1.06 times less return on investment than Vanguard Dividend. But when comparing it to its historical volatility, Osterweis Strategic Income is 3.83 times less risky than Vanguard Dividend. It trades about 0.24 of its potential returns per unit of risk. Vanguard Dividend Growth is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  3,386  in Vanguard Dividend Growth on September 14, 2024 and sell it today you would earn a total of  699.00  from holding Vanguard Dividend Growth or generate 20.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Osterweis Strategic Income  vs.  Vanguard Dividend Growth

Osterweis Strategic

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Osterweis Strategic Income are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Osterweis Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vanguard Dividend Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanguard Dividend Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Vanguard Dividend is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Osterweis Strategic and Vanguard Dividend

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

The idea behind Osterweis Strategic Income and Vanguard Dividend Growth 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.

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