Correlation Between Vanguard Short and Short-intermediate
Can any of the company-specific risk be diversified away by investing in both Vanguard Short and Short-intermediate 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 Short and Short-intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Short Term Bond and Short Intermediate Bond Fund, you can compare the effects of market volatilities on Vanguard Short and Short-intermediate 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 Short with a short position of Short-intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Short and Short-intermediate.
Diversification Opportunities for Vanguard Short and Short-intermediate
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Short-intermediate is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Short Term Bond and Short Intermediate Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Intermediate Bond and Vanguard Short 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 Short Term Bond are associated (or correlated) with Short-intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Intermediate Bond has no effect on the direction of Vanguard Short i.e., Vanguard Short and Short-intermediate go up and down completely randomly.
Pair Corralation between Vanguard Short and Short-intermediate
Assuming the 90 days horizon Vanguard Short Term Bond is expected to generate 1.3 times more return on investment than Short-intermediate. However, Vanguard Short is 1.3 times more volatile than Short Intermediate Bond Fund. It trades about 0.13 of its potential returns per unit of risk. Short Intermediate Bond Fund is currently generating about 0.15 per unit of risk. If you would invest 1,012 in Vanguard Short Term Bond on April 13, 2025 and sell it today you would earn a total of 13.00 from holding Vanguard Short Term Bond or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Short Term Bond vs. Short Intermediate Bond Fund
Performance |
| Timeline |
| Vanguard Short Term |
Risk-Adjusted Performance
OK
Weak | Strong |
| Short Intermediate Bond |
Vanguard Short and Short-intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Short and Short-intermediate
The main advantage of trading using opposite Vanguard Short and Short-intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Short position performs unexpectedly, Short-intermediate 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 Short-intermediate will offset losses from the drop in Short-intermediate's long position.| Vanguard Short vs. Shelton Emerging Markets | Vanguard Short vs. Nasdaq 100 Index Fund | Vanguard Short vs. The Tocqueville Fund | Vanguard Short vs. Multimanager Lifestyle Moderate |
| Short-intermediate vs. Small Pany Fund | Short-intermediate vs. Balanced Fund Institutional | Short-intermediate vs. Income Fund Institutional | Short-intermediate vs. Credit Suisse Floating |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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