Correlation Between Vaughan Nelson and Advisory Research

Can any of the company-specific risk be diversified away by investing in both Vaughan Nelson and Advisory Research 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 Vaughan Nelson and Advisory Research into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vaughan Nelson Emerging and Advisory Research International, you can compare the effects of market volatilities on Vaughan Nelson and Advisory Research 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 Vaughan Nelson with a short position of Advisory Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vaughan Nelson and Advisory Research.

Diversification Opportunities for Vaughan Nelson and Advisory Research

0.97

Correlation Coefficient

Vaughan Nelson  Advisory Research

Almost no diversification

The 3 months correlation between Vaughan and Advisory is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Vaughan Nelson Emerging and Advisory Research Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advisory Research and Vaughan Nelson 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 Vaughan Nelson Emerging are associated (or correlated) with Advisory Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advisory Research has no effect on the direction of Vaughan Nelson i.e., Vaughan Nelson and Advisory Research go up and down completely randomly.

Pair Corralation between Vaughan Nelson and Advisory Research

Assuming the 90 days horizon Vaughan Nelson is expected to generate 1.89 times less return on investment than Advisory Research. But when comparing it to its historical volatility, Vaughan Nelson Emerging is 1.25 times less risky than Advisory Research. It trades about 0.14 of its potential returns per unit of risk. Advisory Research International is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  1,488  in Advisory Research International on May 4, 2025 and sell it today you would earn a total of  205.00  from holding Advisory Research International or generate 13.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Vaughan Nelson Emerging  vs.  Advisory Research Internationa

Vaughan Nelson Emerging

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vaughan Nelson Emerging are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking signals, Vaughan Nelson may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Advisory Research

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Advisory Research International are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Advisory Research showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vaughan Nelson and Advisory Research

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

The idea behind Vaughan Nelson Emerging and Advisory Research International 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.