Correlation Between Vanguard Emerging and Guidemark Large
Can any of the company-specific risk be diversified away by investing in both Vanguard Emerging and Guidemark Large 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 Emerging and Guidemark Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Emerging Markets and Guidemark Large Cap, you can compare the effects of market volatilities on Vanguard Emerging and Guidemark Large 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 Emerging with a short position of Guidemark Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Emerging and Guidemark Large.
Diversification Opportunities for Vanguard Emerging and Guidemark Large
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Guidemark is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Emerging Markets and Guidemark Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidemark Large Cap and Vanguard Emerging 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 Emerging Markets are associated (or correlated) with Guidemark Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidemark Large Cap has no effect on the direction of Vanguard Emerging i.e., Vanguard Emerging and Guidemark Large go up and down completely randomly.
Pair Corralation between Vanguard Emerging and Guidemark Large
Assuming the 90 days horizon Vanguard Emerging is expected to generate 1.07 times less return on investment than Guidemark Large. But when comparing it to its historical volatility, Vanguard Emerging Markets is 1.13 times less risky than Guidemark Large. It trades about 0.24 of its potential returns per unit of risk. Guidemark Large Cap is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,204 in Guidemark Large Cap on May 28, 2025 and sell it today you would earn a total of 129.00 from holding Guidemark Large Cap or generate 10.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Emerging Markets vs. Guidemark Large Cap
Performance |
| Timeline |
| Vanguard Emerging Markets |
| Guidemark Large Cap |
Vanguard Emerging and Guidemark Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Emerging and Guidemark Large
The main advantage of trading using opposite Vanguard Emerging and Guidemark Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Emerging position performs unexpectedly, Guidemark Large 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 Guidemark Large will offset losses from the drop in Guidemark Large's long position.| Vanguard Emerging vs. Vanguard Developed Markets | Vanguard Emerging vs. Vanguard Reit Index | Vanguard Emerging vs. Vanguard Small Cap Index | Vanguard Emerging vs. Vanguard European Stock |
| Guidemark Large vs. Lord Abbett Convertible | Guidemark Large vs. Rationalpier 88 Convertible | Guidemark Large vs. Harbor Vertible Securities | Guidemark Large vs. Calamos Dynamic Convertible |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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