Correlation Between Vanguard Balanced and IShares Russell
Can any of the company-specific risk be diversified away by investing in both Vanguard Balanced and IShares Russell 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 Balanced and IShares Russell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Balanced Index and iShares Russell 1000, you can compare the effects of market volatilities on Vanguard Balanced and IShares Russell 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 Balanced with a short position of IShares Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Balanced and IShares Russell.
Diversification Opportunities for Vanguard Balanced and IShares Russell
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vanguard and IShares is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Balanced Index and iShares Russell 1000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Russell 1000 and Vanguard Balanced 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 Balanced Index are associated (or correlated) with IShares Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Russell 1000 has no effect on the direction of Vanguard Balanced i.e., Vanguard Balanced and IShares Russell go up and down completely randomly.
Pair Corralation between Vanguard Balanced and IShares Russell
Assuming the 90 days horizon Vanguard Balanced Index is expected to generate 0.75 times more return on investment than IShares Russell. However, Vanguard Balanced Index is 1.34 times less risky than IShares Russell. It trades about 0.11 of its potential returns per unit of risk. iShares Russell 1000 is currently generating about 0.06 per unit of risk. If you would invest 5,066 in Vanguard Balanced Index on August 20, 2025 and sell it today you would earn a total of 172.00 from holding Vanguard Balanced Index or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Balanced Index vs. iShares Russell 1000
Performance |
| Timeline |
| Vanguard Balanced Index |
| iShares Russell 1000 |
Vanguard Balanced and IShares Russell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Balanced and IShares Russell
The main advantage of trading using opposite Vanguard Balanced and IShares Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Balanced position performs unexpectedly, IShares Russell 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 IShares Russell will offset losses from the drop in IShares Russell's long position.| Vanguard Balanced vs. Vanguard Balanced Index | Vanguard Balanced vs. Vanguard Large Cap Index | Vanguard Balanced vs. Schwab Large Cap ETF | Vanguard Balanced vs. Vanguard Small Cap Value |
| IShares Russell vs. iShares Russell 2000 | IShares Russell vs. iShares Russell Mid Cap | IShares Russell vs. iShares SP 500 | IShares Russell vs. iShares Russell 1000 |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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