Correlation Between Vanguard Global and Westcore Municipal
Can any of the company-specific risk be diversified away by investing in both Vanguard Global and Westcore Municipal 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 Global and Westcore Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Global Equity and Westcore Municipal Opportunities, you can compare the effects of market volatilities on Vanguard Global and Westcore Municipal 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 Global with a short position of Westcore Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Global and Westcore Municipal.
Diversification Opportunities for Vanguard Global and Westcore Municipal
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VANGUARD and Westcore is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Global Equity and Westcore Municipal Opportuniti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westcore Municipal and Vanguard Global 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 Global Equity are associated (or correlated) with Westcore Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westcore Municipal has no effect on the direction of Vanguard Global i.e., Vanguard Global and Westcore Municipal go up and down completely randomly.
Pair Corralation between Vanguard Global and Westcore Municipal
Assuming the 90 days horizon Vanguard Global Equity is expected to generate 6.48 times more return on investment than Westcore Municipal. However, Vanguard Global is 6.48 times more volatile than Westcore Municipal Opportunities. It trades about 0.18 of its potential returns per unit of risk. Westcore Municipal Opportunities is currently generating about 0.18 per unit of risk. If you would invest 3,786 in Vanguard Global Equity on June 4, 2025 and sell it today you would earn a total of 312.00 from holding Vanguard Global Equity or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Global Equity vs. Westcore Municipal Opportuniti
Performance |
| Timeline |
| Vanguard Global Equity |
| Westcore Municipal |
Vanguard Global and Westcore Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Global and Westcore Municipal
The main advantage of trading using opposite Vanguard Global and Westcore Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Global position performs unexpectedly, Westcore Municipal 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 Westcore Municipal will offset losses from the drop in Westcore Municipal's long position.| Vanguard Global vs. Vanguard Strategic Equity | Vanguard Global vs. Vanguard International Value | Vanguard Global vs. Vanguard Selected Value | Vanguard Global vs. Vanguard International Explorer |
| Westcore Municipal vs. Siit High Yield | Westcore Municipal vs. Ab Global Risk | Westcore Municipal vs. Transamerica High Yield | Westcore Municipal vs. Artisan High Income |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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