Correlation Between Access Capital and Vanguard Energy

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

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

Diversification Opportunities for Access Capital and Vanguard Energy

0.53

Correlation Coefficient

Access Capital  Vanguard Energy

Very weak diversification

The 3 months correlation between Access and Vanguard is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Access Capital Munity and Vanguard Energy Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Energy Index and Access Capital 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 Access Capital Munity are associated (or correlated) with Vanguard Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Energy Index has no effect on the direction of Access Capital i.e., Access Capital and Vanguard Energy go up and down completely randomly.

Pair Corralation between Access Capital and Vanguard Energy

Assuming the 90 days horizon Access Capital Munity is expected to generate 0.28 times more return on investment than Vanguard Energy. However, Access Capital Munity is 3.54 times less risky than Vanguard Energy. It trades about 0.13 of its potential returns per unit of risk. Vanguard Energy Index is currently generating about 0.03 per unit of risk. If you would invest  749.00  in Access Capital Munity on May 16, 2025 and sell it today you would earn a total of  19.00  from holding Access Capital Munity or generate 2.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Access Capital Munity  vs.  Vanguard Energy Index

Access Capital Munity

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Access Capital Munity are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Access Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vanguard Energy Index

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Energy Index are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Vanguard Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Access Capital and Vanguard Energy

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

The idea behind Access Capital Munity and Vanguard Energy Index 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.