Correlation Between Vanguard Funds and Leverage Shares

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

By analyzing existing cross correlation between Vanguard Funds Public and Leverage Shares 3x, you can compare the effects of market volatilities on Vanguard Funds and Leverage Shares 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 Funds with a short position of Leverage Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Funds and Leverage Shares.

Diversification Opportunities for Vanguard Funds and Leverage Shares

-0.87

Correlation Coefficient

Vanguard Funds  Leverage Shares

Pay attention - limited upside

The 3 months correlation between Vanguard and Leverage is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Funds Public and Leverage Shares 3x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leverage Shares 3x and Vanguard Funds 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 Funds Public are associated (or correlated) with Leverage Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leverage Shares 3x has no effect on the direction of Vanguard Funds i.e., Vanguard Funds and Leverage Shares go up and down completely randomly.

Pair Corralation between Vanguard Funds and Leverage Shares

Assuming the 90 days trading horizon Vanguard Funds Public is expected to generate 0.06 times more return on investment than Leverage Shares. However, Vanguard Funds Public is 15.71 times less risky than Leverage Shares. It trades about 0.2 of its potential returns per unit of risk. Leverage Shares 3x is currently generating about -0.06 per unit of risk. If you would invest  9,718  in Vanguard Funds Public on September 26, 2024 and sell it today you would earn a total of  1,096  from holding Vanguard Funds Public or generate 11.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	96.92%
Values	Daily Returns

Vanguard Funds Public  vs.  Leverage Shares 3x

Vanguard Funds Public

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Funds Public are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Vanguard Funds may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Leverage Shares 3x

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Leverage Shares 3x has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Etf's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

Pair Trading with Vanguard Funds and Leverage Shares

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

The idea behind Vanguard Funds Public and Leverage Shares 3x 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.