Correlation Between Vanguard Strategic and Deutsche Gold
Can any of the company-specific risk be diversified away by investing in both Vanguard Strategic and Deutsche Gold 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 Strategic and Deutsche Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Strategic Small Cap and Deutsche Gold Precious, you can compare the effects of market volatilities on Vanguard Strategic and Deutsche Gold 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 Strategic with a short position of Deutsche Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Strategic and Deutsche Gold.
Diversification Opportunities for Vanguard Strategic and Deutsche Gold
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VANGUARD and Deutsche is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Strategic Small Cap and Deutsche Gold Precious in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Gold Precious and Vanguard Strategic 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 Strategic Small Cap are associated (or correlated) with Deutsche Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Gold Precious has no effect on the direction of Vanguard Strategic i.e., Vanguard Strategic and Deutsche Gold go up and down completely randomly.
Pair Corralation between Vanguard Strategic and Deutsche Gold
Assuming the 90 days horizon Vanguard Strategic is expected to generate 1.64 times less return on investment than Deutsche Gold. But when comparing it to its historical volatility, Vanguard Strategic Small Cap is 1.46 times less risky than Deutsche Gold. It trades about 0.18 of its potential returns per unit of risk. Deutsche Gold Precious is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 7,992 in Deutsche Gold Precious on June 9, 2025 and sell it today you would earn a total of 1,706 from holding Deutsche Gold Precious or generate 21.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Strategic Small Cap vs. Deutsche Gold Precious
Performance |
| Timeline |
| Vanguard Strategic |
| Deutsche Gold Precious |
Vanguard Strategic and Deutsche Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Strategic and Deutsche Gold
The main advantage of trading using opposite Vanguard Strategic and Deutsche Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Strategic position performs unexpectedly, Deutsche Gold 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 Deutsche Gold will offset losses from the drop in Deutsche Gold's long position.| Vanguard Strategic vs. Vanguard Mid Cap Index | Vanguard Strategic vs. Vanguard Reit Index | Vanguard Strategic vs. Vanguard Value Index | Vanguard Strategic vs. Vanguard Small Cap Value |
| Deutsche Gold vs. Goldman Sachs Financial | Deutsche Gold vs. Icon Financial Fund | Deutsche Gold vs. Blackrock Financial Institutions | Deutsche Gold vs. Fidelity Advisor Financial |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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