Correlation Between Vanguard Growth and Global X

Can any of the company-specific risk be diversified away by investing in both Vanguard Growth and Global X 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 Growth and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vanguard Growth Index and Global X Uranium, you can compare the effects of market volatilities on Vanguard Growth and Global X 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 Growth with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Growth and Global X.

Diversification Opportunities for Vanguard Growth and Global X

-0.34

Correlation Coefficient

Vanguard Growth  Global X

Very good diversification

The 3 months correlation between Vanguard and Global is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Growth Index and Global X Uranium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Uranium and Vanguard Growth 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 Growth Index are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Uranium has no effect on the direction of Vanguard Growth i.e., Vanguard Growth and Global X go up and down completely randomly.

Pair Corralation between Vanguard Growth and Global X

Considering the 90-day investment horizon Vanguard Growth Index is expected to under-perform the Global X. But the etf apears to be less risky and, when comparing its historical volatility, Vanguard Growth Index is 1.42 times less risky than Global X. The etf trades about -0.1 of its potential returns per unit of risk. The Global X Uranium is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  3,012  in Global X Uranium on January 30, 2024 and sell it today you would lose (62.00) from holding Global X Uranium or give up 2.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Vanguard Growth Index  vs.  Global X Uranium

Vanguard Growth Index

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Growth Index are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Vanguard Growth is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Global X Uranium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X Uranium has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Global X is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vanguard Growth and Global X

The main advantage of trading using opposite Vanguard Growth and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Growth position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.

The idea behind Vanguard Growth Index and Global X Uranium 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.

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.