Correlation Between Vanguard Multi and Vanguard Mid-cap
Can any of the company-specific risk be diversified away by investing in both Vanguard Multi 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 Multi 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 Multi Sector Income and Vanguard Mid Cap Value, you can compare the effects of market volatilities on Vanguard Multi 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 Multi with a short position of Vanguard Mid-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Multi and Vanguard Mid-cap.
Diversification Opportunities for Vanguard Multi and Vanguard Mid-cap
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Vanguard is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Multi Sector Income 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 Multi 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 Multi Sector Income 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 Multi i.e., Vanguard Multi and Vanguard Mid-cap go up and down completely randomly.
Pair Corralation between Vanguard Multi and Vanguard Mid-cap
Assuming the 90 days horizon Vanguard Multi is expected to generate 2.98 times less return on investment than Vanguard Mid-cap. But when comparing it to its historical volatility, Vanguard Multi Sector Income is 6.17 times less risky than Vanguard Mid-cap. It trades about 0.18 of its potential returns per unit of risk. Vanguard Mid Cap Value is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 8,853 in Vanguard Mid Cap Value on September 9, 2025 and sell it today you would earn a total of 338.00 from holding Vanguard Mid Cap Value or generate 3.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Multi Sector Income vs. Vanguard Mid Cap Value
Performance |
| Timeline |
| Vanguard Multi Sector |
| Vanguard Mid Cap |
Vanguard Multi and Vanguard Mid-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Multi and Vanguard Mid-cap
The main advantage of trading using opposite Vanguard Multi and Vanguard Mid-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Multi 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 Multi vs. Auer Growth Fund | Vanguard Multi vs. Qs Moderate Growth | Vanguard Multi vs. Qs Defensive Growth | Vanguard Multi vs. Guidemark Large Cap |
| Vanguard Mid-cap vs. Vanguard Small Cap Growth | Vanguard Mid-cap vs. Fidelity Freedom 2040 | Vanguard Mid-cap vs. Vanguard Small Cap Value | Vanguard Mid-cap vs. Vanguard Sumer Staples |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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