Correlation Between Vanguard Global and Vanguard Mid-cap
Can any of the company-specific risk be diversified away by investing in both Vanguard Global and Vanguard Mid-cap 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 Vanguard Mid-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Global Minimum and Vanguard Mid Cap Value, you can compare the effects of market volatilities on Vanguard Global and Vanguard Mid-cap 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 Vanguard Mid-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Global and Vanguard Mid-cap.
Diversification Opportunities for Vanguard Global and Vanguard Mid-cap
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Vanguard is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Global Minimum and Vanguard Mid Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Mid Cap 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 Minimum are associated (or correlated) with Vanguard Mid-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Mid Cap has no effect on the direction of Vanguard Global i.e., Vanguard Global and Vanguard Mid-cap go up and down completely randomly.
Pair Corralation between Vanguard Global and Vanguard Mid-cap
Assuming the 90 days horizon Vanguard Global is expected to generate 2.87 times less return on investment than Vanguard Mid-cap. But when comparing it to its historical volatility, Vanguard Global Minimum is 1.79 times less risky than Vanguard Mid-cap. It trades about 0.1 of its potential returns per unit of risk. Vanguard Mid Cap Value is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 6,363 in Vanguard Mid Cap Value on June 8, 2025 and sell it today you would earn a total of 438.00 from holding Vanguard Mid Cap Value or generate 6.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Global Minimum vs. Vanguard Mid Cap Value
Performance |
| Timeline |
| Vanguard Global Minimum |
| Vanguard Mid Cap |
Vanguard Global and Vanguard Mid-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Global and Vanguard Mid-cap
The main advantage of trading using opposite Vanguard Global and Vanguard Mid-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Global position performs unexpectedly, Vanguard Mid-cap 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 Vanguard Mid-cap will offset losses from the drop in Vanguard Mid-cap's long position.| Vanguard Global vs. Vanguard Global Minimum | Vanguard Global vs. Vanguard Global Wellington | Vanguard Global vs. Vanguard Tax Managed Capital | Vanguard Global vs. Vanguard Tax Managed Balanced |
| Vanguard Mid-cap vs. Blackrock Health Sciences | Vanguard Mid-cap vs. Schwab Health Care | Vanguard Mid-cap vs. Health Care Ultrasector | Vanguard Mid-cap vs. Invesco 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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