Correlation Between Vanguard Total and Horizon Active
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Horizon Active 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 Active 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 Active Income, you can compare the effects of market volatilities on Vanguard Total and Horizon Active 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 Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Horizon Active.
Diversification Opportunities for Vanguard Total and Horizon Active
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Horizon is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total International and Horizon Active Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Active Income 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 Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Active Income has no effect on the direction of Vanguard Total i.e., Vanguard Total and Horizon Active go up and down completely randomly.
Pair Corralation between Vanguard Total and Horizon Active
Assuming the 90 days horizon Vanguard Total International is expected to generate 2.25 times more return on investment than Horizon Active. However, Vanguard Total is 2.25 times more volatile than Horizon Active Income. It trades about 0.33 of its potential returns per unit of risk. Horizon Active Income is currently generating about 0.05 per unit of risk. If you would invest 13,502 in Vanguard Total International on April 25, 2025 and sell it today you would earn a total of 1,749 from holding Vanguard Total International or generate 12.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total International vs. Horizon Active Income
Performance |
| Timeline |
| Vanguard Total Inter |
| Horizon Active Income |
Vanguard Total and Horizon Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Horizon Active
The main advantage of trading using opposite Vanguard Total and Horizon Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Horizon Active 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 Active will offset losses from the drop in Horizon Active's long position.| Vanguard Total vs. Scharf Global Opportunity | Vanguard Total vs. T Rowe Price | Vanguard Total vs. Barings Global Floating | Vanguard Total vs. Calvert Global Energy |
| Horizon Active vs. Goldman Sachs Equity | Horizon Active vs. Aqr Long Short Equity | Horizon Active vs. Us Vector Equity | Horizon Active vs. Franklin Equity 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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