Correlation Between Vanguard FTSE and HANetf ICAV
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE and HANetf ICAV 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 FTSE and HANetf ICAV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard FTSE All World and HANetf ICAV , you can compare the effects of market volatilities on Vanguard FTSE and HANetf ICAV 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 FTSE with a short position of HANetf ICAV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and HANetf ICAV.
Diversification Opportunities for Vanguard FTSE and HANetf ICAV
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and HANetf is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE All World and HANetf ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANetf ICAV and Vanguard FTSE 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 FTSE All World are associated (or correlated) with HANetf ICAV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANetf ICAV has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and HANetf ICAV go up and down completely randomly.
Pair Corralation between Vanguard FTSE and HANetf ICAV
Assuming the 90 days trading horizon Vanguard FTSE is expected to generate 63.41 times less return on investment than HANetf ICAV. But when comparing it to its historical volatility, Vanguard FTSE All World is 3.57 times less risky than HANetf ICAV. It trades about 0.01 of its potential returns per unit of risk. HANetf ICAV is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,338 in HANetf ICAV on September 25, 2024 and sell it today you would earn a total of 70.00 from holding HANetf ICAV or generate 5.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Vanguard FTSE All World vs. HANetf ICAV
Performance |
Timeline |
Vanguard FTSE All |
HANetf ICAV |
Vanguard FTSE and HANetf ICAV Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vanguard FTSE and HANetf ICAV
The main advantage of trading using opposite Vanguard FTSE and HANetf ICAV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE position performs unexpectedly, HANetf ICAV 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 HANetf ICAV will offset losses from the drop in HANetf ICAV's long position.Vanguard FTSE vs. UBS Fund Solutions | Vanguard FTSE vs. Xtrackers II | Vanguard FTSE vs. Xtrackers Nikkei 225 | Vanguard FTSE vs. iShares VII PLC |
HANetf ICAV vs. UBS Fund Solutions | HANetf ICAV vs. Xtrackers II | HANetf ICAV vs. Xtrackers Nikkei 225 | HANetf ICAV vs. iShares VII PLC |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |