Correlation Between Vanguard Health and Diamond Hill
Can any of the company-specific risk be diversified away by investing in both Vanguard Health and Diamond Hill 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 Health and Diamond Hill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Health Care and Diamond Hill Small Mid, you can compare the effects of market volatilities on Vanguard Health and Diamond Hill 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 Health with a short position of Diamond Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Health and Diamond Hill.
Diversification Opportunities for Vanguard Health and Diamond Hill
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and Diamond is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Health Care and Diamond Hill Small Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Hill Small and Vanguard Health 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 Health Care are associated (or correlated) with Diamond Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Hill Small has no effect on the direction of Vanguard Health i.e., Vanguard Health and Diamond Hill go up and down completely randomly.
Pair Corralation between Vanguard Health and Diamond Hill
Assuming the 90 days horizon Vanguard Health Care is expected to generate 0.96 times more return on investment than Diamond Hill. However, Vanguard Health Care is 1.04 times less risky than Diamond Hill. It trades about 0.24 of its potential returns per unit of risk. Diamond Hill Small Mid is currently generating about -0.01 per unit of risk. If you would invest 18,079 in Vanguard Health Care on September 4, 2025 and sell it today you would earn a total of 2,700 from holding Vanguard Health Care or generate 14.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Vanguard Health Care vs. Diamond Hill Small Mid
Performance |
| Timeline |
| Vanguard Health Care |
| Diamond Hill Small |
Vanguard Health and Diamond Hill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Health and Diamond Hill
The main advantage of trading using opposite Vanguard Health and Diamond Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Health position performs unexpectedly, Diamond Hill 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 Diamond Hill will offset losses from the drop in Diamond Hill's long position.| Vanguard Health vs. Valic Company I | Vanguard Health vs. T Rowe Price | Vanguard Health vs. T Rowe Price | Vanguard Health vs. Hood River New |
| Diamond Hill vs. Vanguard Health Care | Diamond Hill vs. The Hartford Healthcare | Diamond Hill vs. Blackrock Health Sciences | Diamond Hill vs. Putnam Global Health |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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