Correlation Between Vanguard Total and Horizon Us
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Horizon Us 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 Total and Horizon Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total International and Horizon Defensive Equity, you can compare the effects of market volatilities on Vanguard Total and Horizon Us 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 Total with a short position of Horizon Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Horizon Us.
Diversification Opportunities for Vanguard Total and Horizon Us
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vanguard and Horizon is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total International and Horizon Defensive Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Defensive Equity and Vanguard Total 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 Total International are associated (or correlated) with Horizon Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Defensive Equity has no effect on the direction of Vanguard Total i.e., Vanguard Total and Horizon Us go up and down completely randomly.
Pair Corralation between Vanguard Total and Horizon Us
Assuming the 90 days horizon Vanguard Total is expected to generate 1.02 times less return on investment than Horizon Us. But when comparing it to its historical volatility, Vanguard Total International is 1.06 times less risky than Horizon Us. It trades about 0.31 of its potential returns per unit of risk. Horizon Defensive Equity is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,897 in Horizon Defensive Equity on April 23, 2025 and sell it today you would earn a total of 361.00 from holding Horizon Defensive Equity or generate 12.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Vanguard Total International vs. Horizon Defensive Equity
Performance |
| Timeline |
| Vanguard Total Inter |
| Horizon Defensive Equity |
Vanguard Total and Horizon Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Horizon Us
The main advantage of trading using opposite Vanguard Total and Horizon Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Horizon Us 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 Horizon Us will offset losses from the drop in Horizon Us' long position.| Vanguard Total vs. Vanguard Total Bond | Vanguard Total vs. Vanguard Total Stock | Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Small Cap Index |
| Horizon Us vs. Horizon Active Risk | Horizon Us vs. Horizon Active Risk | Horizon Us vs. Horizon Active Asset | Horizon Us vs. Horizon Active Dividend |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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