Correlation Between Vanguard Value and Valic Company
Can any of the company-specific risk be diversified away by investing in both Vanguard Value and Valic Company 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 Value and Valic Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Value Index and Valic Company I, you can compare the effects of market volatilities on Vanguard Value and Valic Company 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 Value with a short position of Valic Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Value and Valic Company.
Diversification Opportunities for Vanguard Value and Valic Company
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Valic is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Value Index and Valic Company I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valic Company I and Vanguard Value 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 Value Index are associated (or correlated) with Valic Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valic Company I has no effect on the direction of Vanguard Value i.e., Vanguard Value and Valic Company go up and down completely randomly.
Pair Corralation between Vanguard Value and Valic Company
Assuming the 90 days horizon Vanguard Value is expected to generate 1.01 times less return on investment than Valic Company. In addition to that, Vanguard Value is 1.05 times more volatile than Valic Company I. It trades about 0.16 of its total potential returns per unit of risk. Valic Company I is currently generating about 0.17 per unit of volatility. If you would invest 1,245 in Valic Company I on June 6, 2025 and sell it today you would earn a total of 71.00 from holding Valic Company I or generate 5.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Value Index vs. Valic Company I
Performance |
| Timeline |
| Vanguard Value Index |
| Valic Company I |
Vanguard Value and Valic Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Value and Valic Company
The main advantage of trading using opposite Vanguard Value and Valic Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Value position performs unexpectedly, Valic Company 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 Valic Company will offset losses from the drop in Valic Company's long position.| Vanguard Value vs. Vanguard Materials Index | Vanguard Value vs. Vanguard Limited Term Tax Exempt | Vanguard Value vs. Vanguard Limited Term Tax Exempt | Vanguard Value vs. Vanguard Global Minimum |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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