Correlation Between Vanguard Long and Bondbloxx ETF

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

By analyzing existing cross correlation between Vanguard Long Term Treasury and Bondbloxx ETF Trust, you can compare the effects of market volatilities on Vanguard Long and Bondbloxx ETF 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 Bondbloxx ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Long and Bondbloxx ETF.

Diversification Opportunities for Vanguard Long and Bondbloxx ETF

0.97

Correlation Coefficient

Vanguard Long  Bondbloxx ETF

Almost no diversification

The 3 months correlation between Vanguard and Bondbloxx is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Long Term Treasury and Bondbloxx ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bondbloxx ETF Trust and Vanguard Long 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 Long Term Treasury are associated (or correlated) with Bondbloxx ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bondbloxx ETF Trust has no effect on the direction of Vanguard Long i.e., Vanguard Long and Bondbloxx ETF go up and down completely randomly.

Pair Corralation between Vanguard Long and Bondbloxx ETF

Given the investment horizon of 90 days Vanguard Long Term Treasury is expected to under-perform the Bondbloxx ETF. In addition to that, Vanguard Long is 5.11 times more volatile than Bondbloxx ETF Trust. It trades about -0.18 of its total potential returns per unit of risk. Bondbloxx ETF Trust is currently generating about -0.14 per unit of volatility. If you would invest  4,959  in Bondbloxx ETF Trust on September 16, 2024 and sell it today you would lose (69.00) from holding Bondbloxx ETF Trust or give up 1.39% of portfolio value over 90 days.

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

Vanguard Long Term Treasury  vs.  Bondbloxx ETF Trust

Vanguard Long Term

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanguard Long Term Treasury has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Bondbloxx ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bondbloxx ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Bondbloxx ETF is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Vanguard Long and Bondbloxx ETF

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

The idea behind Vanguard Long Term Treasury and Bondbloxx ETF Trust 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.