Correlation Between Vanguard Intermediate and SPDR Barclays
Can any of the company-specific risk be diversified away by investing in both Vanguard Intermediate and SPDR Barclays 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 Intermediate and SPDR Barclays into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Intermediate Term Corporate and SPDR Barclays Long, you can compare the effects of market volatilities on Vanguard Intermediate and SPDR Barclays 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 Intermediate with a short position of SPDR Barclays. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Intermediate and SPDR Barclays.
Diversification Opportunities for Vanguard Intermediate and SPDR Barclays
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and SPDR is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Intermediate Term Cor and SPDR Barclays Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Barclays Long and Vanguard Intermediate 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 Intermediate Term Corporate are associated (or correlated) with SPDR Barclays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Barclays Long has no effect on the direction of Vanguard Intermediate i.e., Vanguard Intermediate and SPDR Barclays go up and down completely randomly.
Pair Corralation between Vanguard Intermediate and SPDR Barclays
Given the investment horizon of 90 days Vanguard Intermediate is expected to generate 1.76 times less return on investment than SPDR Barclays. But when comparing it to its historical volatility, Vanguard Intermediate Term Corporate is 2.16 times less risky than SPDR Barclays. It trades about 0.21 of its potential returns per unit of risk. SPDR Barclays Long is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,207 in SPDR Barclays Long on August 30, 2025 and sell it today you would earn a total of 112.00 from holding SPDR Barclays Long or generate 5.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Intermediate Term Cor vs. SPDR Barclays Long
Performance |
| Timeline |
| Vanguard Intermediate |
| SPDR Barclays Long |
Vanguard Intermediate and SPDR Barclays Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Intermediate and SPDR Barclays
The main advantage of trading using opposite Vanguard Intermediate and SPDR Barclays positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Intermediate position performs unexpectedly, SPDR Barclays 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 SPDR Barclays will offset losses from the drop in SPDR Barclays' long position.The idea behind Vanguard Intermediate Term Corporate and SPDR Barclays Long 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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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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