Correlation Between Vanguard Consumer and Mast Global

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

By analyzing existing cross correlation between Vanguard Consumer Discretionary and Mast Global Battery, you can compare the effects of market volatilities on Vanguard Consumer and Mast Global 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 Consumer with a short position of Mast Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Consumer and Mast Global.

Diversification Opportunities for Vanguard Consumer and Mast Global

0.16

Correlation Coefficient

Vanguard Consumer  Mast Global

Average diversification

The 3 months correlation between Vanguard and Mast is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Consumer Discretionar and Mast Global Battery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mast Global Battery and Vanguard Consumer 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 Consumer Discretionary are associated (or correlated) with Mast Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mast Global Battery has no effect on the direction of Vanguard Consumer i.e., Vanguard Consumer and Mast Global go up and down completely randomly.

Pair Corralation between Vanguard Consumer and Mast Global

Considering the 90-day investment horizon Vanguard Consumer Discretionary is expected to generate 0.61 times more return on investment than Mast Global. However, Vanguard Consumer Discretionary is 1.65 times less risky than Mast Global. It trades about 0.31 of its potential returns per unit of risk. Mast Global Battery is currently generating about 0.1 per unit of risk. If you would invest  32,462  in Vanguard Consumer Discretionary on September 12, 2024 and sell it today you would earn a total of  7,267  from holding Vanguard Consumer Discretionary or generate 22.39% return on investment over 90 days.

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

Vanguard Consumer Discretionar  vs.  Mast Global Battery

Vanguard Consumer

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Consumer Discretionary are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady fundamental indicators, Vanguard Consumer reported solid returns over the last few months and may actually be approaching a breakup point.

Mast Global Battery

Risk-Adjusted Performance

7 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mast Global Battery are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Mast Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Vanguard Consumer and Mast Global

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

The idea behind Vanguard Consumer Discretionary and Mast Global Battery 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..