Correlation Between Vanguard International and Vanguard International

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

By analyzing existing cross correlation between Vanguard International Value and Vanguard International Explorer, you can compare the effects of market volatilities on Vanguard International and Vanguard International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard International and Vanguard International.

Diversification Opportunities for Vanguard International and Vanguard International

0.91

Correlation Coefficient

Vanguard International  Vanguard International

Almost no diversification

The 3 months correlation between Vanguard and Vanguard is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard International Value and Vanguard International Explore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard International 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 Value are associated (or correlated) with Vanguard International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard International has no effect on the direction of Vanguard International i.e., Vanguard International and Vanguard International go up and down completely randomly.

Pair Corralation between Vanguard International and Vanguard International

Assuming the 90 days horizon Vanguard International Value is expected to under-perform the Vanguard International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Vanguard International Value is 1.05 times less risky than Vanguard International. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Vanguard International Explorer is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,749  in Vanguard International Explorer on September 2, 2024 and sell it today you would earn a total of  4.00  from holding Vanguard International Explorer or generate 0.23% 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 Value  vs.  Vanguard International Explore

Vanguard International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Vanguard International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Vanguard International and Vanguard International

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

The idea behind Vanguard International Value and Vanguard International Explorer 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.