Correlation Between Vanguard Short-term and Intermediate Government
Can any of the company-specific risk be diversified away by investing in both Vanguard Short-term and Intermediate Government 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-term and Intermediate Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Short Term Treasury and Intermediate Government Bond, you can compare the effects of market volatilities on Vanguard Short-term and Intermediate Government 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-term with a short position of Intermediate Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Short-term and Intermediate Government.
Diversification Opportunities for Vanguard Short-term and Intermediate Government
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vanguard and Intermediate is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Short Term Treasury and Intermediate Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Government and Vanguard Short-term 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 Treasury are associated (or correlated) with Intermediate Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Government has no effect on the direction of Vanguard Short-term i.e., Vanguard Short-term and Intermediate Government go up and down completely randomly.
Pair Corralation between Vanguard Short-term and Intermediate Government
Assuming the 90 days horizon Vanguard Short Term Treasury is expected to generate 1.4 times more return on investment than Intermediate Government. However, Vanguard Short-term is 1.4 times more volatile than Intermediate Government Bond. It trades about 0.24 of its potential returns per unit of risk. Intermediate Government Bond is currently generating about 0.19 per unit of risk. If you would invest 982.00 in Vanguard Short Term Treasury on March 25, 2025 and sell it today you would earn a total of 7.00 from holding Vanguard Short Term Treasury or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Short Term Treasury vs. Intermediate Government Bond
Performance |
| Timeline |
| Vanguard Short Term |
| Intermediate Government |
Vanguard Short-term and Intermediate Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Short-term and Intermediate Government
The main advantage of trading using opposite Vanguard Short-term and Intermediate Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Short-term position performs unexpectedly, Intermediate Government 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 Intermediate Government will offset losses from the drop in Intermediate Government's long position.| Vanguard Short-term vs. Jhancock Short Duration | Vanguard Short-term vs. Cmg Ultra Short | Vanguard Short-term vs. Shenkman Short Duration | Vanguard Short-term vs. Transamerica Short Term Bond |
| Intermediate Government vs. Templeton Global Balanced | Intermediate Government vs. Gamco Global Opportunity | Intermediate Government vs. Calvert Global Energy | Intermediate Government vs. Ab Global Risk |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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