Correlation Between Vanguard Total and Short-intermediate
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Short-intermediate 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 Short-intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Stock and Short Intermediate Bond Fund, you can compare the effects of market volatilities on Vanguard Total and Short-intermediate 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 Short-intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Short-intermediate.
Diversification Opportunities for Vanguard Total and Short-intermediate
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Short-intermediate is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock and Short Intermediate Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Intermediate Bond 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 Stock are associated (or correlated) with Short-intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Intermediate Bond has no effect on the direction of Vanguard Total i.e., Vanguard Total and Short-intermediate go up and down completely randomly.
Pair Corralation between Vanguard Total and Short-intermediate
Assuming the 90 days horizon Vanguard Total Stock is expected to generate 13.08 times more return on investment than Short-intermediate. However, Vanguard Total is 13.08 times more volatile than Short Intermediate Bond Fund. It trades about 0.08 of its potential returns per unit of risk. Short Intermediate Bond Fund is currently generating about 0.12 per unit of risk. If you would invest 13,536 in Vanguard Total Stock on April 2, 2025 and sell it today you would earn a total of 1,231 from holding Vanguard Total Stock or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total Stock vs. Short Intermediate Bond Fund
Performance |
| Timeline |
| Vanguard Total Stock |
| Short Intermediate Bond |
Vanguard Total and Short-intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Short-intermediate
The main advantage of trading using opposite Vanguard Total and Short-intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Short-intermediate 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 Short-intermediate will offset losses from the drop in Short-intermediate's long position.| Vanguard Total vs. Guggenheim High Yield | Vanguard Total vs. Calvert High Yield | Vanguard Total vs. Federated High Yield | Vanguard Total vs. Dunham High Yield |
| Short-intermediate vs. Edgewood Growth Fund | Short-intermediate vs. Ab Small Cap | Short-intermediate vs. Pnc International Growth | Short-intermediate vs. Federated Mdt Small |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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