Correlation Between Vanguard Growth and Ave Maria

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

By analyzing existing cross correlation between Vanguard Growth Fund and Ave Maria Value, you can compare the effects of market volatilities on Vanguard Growth and Ave Maria 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 Growth with a short position of Ave Maria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Growth and Ave Maria.

Diversification Opportunities for Vanguard Growth and Ave Maria

0.72

Correlation Coefficient

Vanguard Growth  Ave Maria

Poor diversification

The 3 months correlation between Vanguard and Ave is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Growth Fund and Ave Maria Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ave Maria Value and Vanguard Growth 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 Growth Fund are associated (or correlated) with Ave Maria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ave Maria Value has no effect on the direction of Vanguard Growth i.e., Vanguard Growth and Ave Maria go up and down completely randomly.

Pair Corralation between Vanguard Growth and Ave Maria

Assuming the 90 days horizon Vanguard Growth is expected to generate 2.04 times less return on investment than Ave Maria. In addition to that, Vanguard Growth is 1.23 times more volatile than Ave Maria Value. It trades about 0.04 of its total potential returns per unit of risk. Ave Maria Value is currently generating about 0.11 per unit of volatility. If you would invest  2,507  in Ave Maria Value on September 30, 2024 and sell it today you would earn a total of  409.00  from holding Ave Maria Value or generate 16.31% return on investment over 90 days.

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

Vanguard Growth Fund  vs.  Ave Maria Value

Vanguard Growth

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Growth Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Vanguard Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ave Maria Value

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ave Maria Value are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Ave Maria 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 Growth and Ave Maria

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

The idea behind Vanguard Growth Fund and Ave Maria Value 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.