Correlation Between Vanguard Growth and IShares Canadian
Can any of the company-specific risk be diversified away by investing in both Vanguard Growth and IShares Canadian 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 Growth and IShares Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Growth Portfolio and iShares Canadian Universe, you can compare the effects of market volatilities on Vanguard Growth and IShares Canadian 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 Growth with a short position of IShares Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Growth and IShares Canadian.
Diversification Opportunities for Vanguard Growth and IShares Canadian
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vanguard and IShares is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Growth Portfolio and iShares Canadian Universe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Canadian Universe and Vanguard Growth 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 Growth Portfolio are associated (or correlated) with IShares Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Canadian Universe has no effect on the direction of Vanguard Growth i.e., Vanguard Growth and IShares Canadian go up and down completely randomly.
Pair Corralation between Vanguard Growth and IShares Canadian
Assuming the 90 days trading horizon Vanguard Growth Portfolio is expected to generate 2.65 times more return on investment than IShares Canadian. However, Vanguard Growth is 2.65 times more volatile than iShares Canadian Universe. It trades about 0.16 of its potential returns per unit of risk. iShares Canadian Universe is currently generating about 0.15 per unit of risk. If you would invest 4,082 in Vanguard Growth Portfolio on September 4, 2025 and sell it today you would earn a total of 241.00 from holding Vanguard Growth Portfolio or generate 5.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Growth Portfolio vs. iShares Canadian Universe
Performance |
| Timeline |
| Vanguard Growth Portfolio |
| iShares Canadian Universe |
Vanguard Growth and IShares Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Growth and IShares Canadian
The main advantage of trading using opposite Vanguard Growth and IShares Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Growth position performs unexpectedly, IShares Canadian 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 IShares Canadian will offset losses from the drop in IShares Canadian's long position.| Vanguard Growth vs. Vanguard Canadian Long Term | Vanguard Growth vs. Vanguard Global Momentum | Vanguard Growth vs. Vanguard Balanced Portfolio | Vanguard Growth vs. Vanguard Canadian Aggregate |
| IShares Canadian vs. iShares Convertible Bond | IShares Canadian vs. iShares SP Mid Cap | IShares Canadian vs. iShares Edge MSCI | IShares Canadian vs. iShares Flexible Monthly |
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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