Correlation Between Federated Strategic and Vanguard Strategic
Can any of the company-specific risk be diversified away by investing in both Federated Strategic and Vanguard Strategic 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 Federated Strategic and Vanguard Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Strategic Value and Vanguard Strategic Equity, you can compare the effects of market volatilities on Federated Strategic and Vanguard Strategic 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 Federated Strategic with a short position of Vanguard Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Strategic and Vanguard Strategic.
Diversification Opportunities for Federated Strategic and Vanguard Strategic
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Federated and Vanguard is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Federated Strategic Value and Vanguard Strategic Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Strategic Equity and Federated Strategic 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 Federated Strategic Value are associated (or correlated) with Vanguard Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Strategic Equity has no effect on the direction of Federated Strategic i.e., Federated Strategic and Vanguard Strategic go up and down completely randomly.
Pair Corralation between Federated Strategic and Vanguard Strategic
Assuming the 90 days horizon Federated Strategic is expected to generate 2.5 times less return on investment than Vanguard Strategic. But when comparing it to its historical volatility, Federated Strategic Value is 2.55 times less risky than Vanguard Strategic. It trades about 0.15 of its potential returns per unit of risk. Vanguard Strategic Equity is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,284 in Vanguard Strategic Equity on October 7, 2025 and sell it today you would earn a total of 505.00 from holding Vanguard Strategic Equity or generate 15.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Strategic Value vs. Vanguard Strategic Equity
Performance |
| Timeline |
| Federated Strategic Value |
| Vanguard Strategic Equity |
Federated Strategic and Vanguard Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Strategic and Vanguard Strategic
The main advantage of trading using opposite Federated Strategic and Vanguard Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Strategic position performs unexpectedly, Vanguard Strategic 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 Strategic will offset losses from the drop in Vanguard Strategic's long position.| Federated Strategic vs. T Rowe Price | Federated Strategic vs. Tiaa Cref Large Cap Value | Federated Strategic vs. Guggenheim Macro Opportunities | Federated Strategic vs. Fidelity Emerging Markets |
| Vanguard Strategic vs. Vanguard Tax Managed Small Cap | Vanguard Strategic vs. T Rowe Price | Vanguard Strategic vs. Tiaa Cref Large Cap Value | Vanguard Strategic vs. T Rowe Price |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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