Correlation Between Vanguard Value and Apple

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Can any of the company-specific risk be diversified away by investing in both Vanguard Value and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on Vanguard Value and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Value and Apple.

Diversification Opportunities for Vanguard Value and Apple

-0.84
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Vanguard and Apple is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Value Index and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Vanguard Value i.e., Vanguard Value and Apple go up and down completely randomly.

Pair Corralation between Vanguard Value and Apple

Considering the 90-day investment horizon Vanguard Value Index is expected to generate 0.53 times more return on investment than Apple. However, Vanguard Value Index is 1.89 times less risky than Apple. It trades about 0.16 of its potential returns per unit of risk. Apple Inc is currently generating about -0.04 per unit of risk. If you would invest  14,073  in Vanguard Value Index on December 29, 2023 and sell it today you would earn a total of  2,213  from holding Vanguard Value Index or generate 15.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Vanguard Value Index  vs.  Apple Inc

 Performance 
       Timeline  
Vanguard Value Index 

Risk-Adjusted Performance

21 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Value Index are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Vanguard Value may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Apple Inc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Vanguard Value and Apple Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Vanguard Value and Apple

The main advantage of trading using opposite Vanguard Value and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Value position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.
The idea behind Vanguard Value Index and Apple Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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