Correlation Between Vanguard Intermediate and Precious Metals

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

By analyzing existing cross correlation between Vanguard Intermediate Term Treasury and Precious Metals And, you can compare the effects of market volatilities on Vanguard Intermediate and Precious Metals 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 Intermediate with a short position of Precious Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Intermediate and Precious Metals.

Diversification Opportunities for Vanguard Intermediate and Precious Metals

0.49

Correlation Coefficient

Vanguard Intermediate  Precious Metals

Very weak diversification

The 3 months correlation between Vanguard and Precious is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Intermediate Term Tre and Precious Metals And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precious Metals And and Vanguard Intermediate 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 Intermediate Term Treasury are associated (or correlated) with Precious Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precious Metals And has no effect on the direction of Vanguard Intermediate i.e., Vanguard Intermediate and Precious Metals go up and down completely randomly.

Pair Corralation between Vanguard Intermediate and Precious Metals

Assuming the 90 days horizon Vanguard Intermediate is expected to generate 1.81 times less return on investment than Precious Metals. But when comparing it to its historical volatility, Vanguard Intermediate Term Treasury is 6.68 times less risky than Precious Metals. It trades about 0.08 of its potential returns per unit of risk. Precious Metals And is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,956  in Precious Metals And on May 6, 2025 and sell it today you would earn a total of  44.00  from holding Precious Metals And or generate 1.49% return on investment over 90 days.

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

Vanguard Intermediate Term Tre  vs.  Precious Metals And

Vanguard Intermediate

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Intermediate Term Treasury are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Vanguard Intermediate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Precious Metals And

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Precious Metals And are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Precious Metals is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vanguard Intermediate and Precious Metals

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

The idea behind Vanguard Intermediate Term Treasury and Precious Metals And 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.