Correlation Between Vanguard Growth and SPDR SP

Can any of the company-specific risk be diversified away by investing in both Vanguard Growth and SPDR SP 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 SPDR SP 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 SPDR SP 600, you can compare the effects of market volatilities on Vanguard Growth and SPDR SP 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 SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Growth and SPDR SP.

Diversification Opportunities for Vanguard Growth and SPDR SP

0.78

Correlation Coefficient

Vanguard Growth  SPDR SP

Poor diversification

The 3 months correlation between Vanguard and SPDR is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Growth Index and SPDR SP 600 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP 600 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 SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP 600 has no effect on the direction of Vanguard Growth i.e., Vanguard Growth and SPDR SP go up and down completely randomly.

Pair Corralation between Vanguard Growth and SPDR SP

Assuming the 90 days horizon Vanguard Growth Index is expected to generate 0.77 times more return on investment than SPDR SP. However, Vanguard Growth Index is 1.31 times less risky than SPDR SP. It trades about 0.15 of its potential returns per unit of risk. SPDR SP 600 is currently generating about 0.06 per unit of risk. If you would invest  23,292  in Vanguard Growth Index on July 21, 2025 and sell it today you would earn a total of  1,335  from holding Vanguard Growth Index or generate 5.73% return on investment over 90 days.

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

Vanguard Growth Index  vs.  SPDR SP 600

Vanguard Growth Index

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Growth Index are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly fragile basic indicators, Vanguard Growth may actually be approaching a critical reversion point that can send shares even higher in November 2025.

SPDR SP 600

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR SP 600 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SPDR SP is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Vanguard Growth and SPDR SP

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

The idea behind Vanguard Growth Index and SPDR SP 600 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.