Correlation Between Vanguard Information and Intermediate Government

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

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

Diversification Opportunities for Vanguard Information and Intermediate Government

0.75

Correlation Coefficient

Vanguard Information  Intermediate Government

Poor diversification

The 3 months correlation between Vanguard and Intermediate is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Information Technolog and Intermediate Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Government and Vanguard Information 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 Information Technology are associated (or correlated) with Intermediate Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Government has no effect on the direction of Vanguard Information i.e., Vanguard Information and Intermediate Government go up and down completely randomly.

Pair Corralation between Vanguard Information and Intermediate Government

Assuming the 90 days horizon Vanguard Information Technology is expected to generate 6.99 times more return on investment than Intermediate Government. However, Vanguard Information is 6.99 times more volatile than Intermediate Government Bond. It trades about 0.21 of its potential returns per unit of risk. Intermediate Government Bond is currently generating about 0.17 per unit of risk. If you would invest  33,608  in Vanguard Information Technology on June 27, 2025 and sell it today you would earn a total of  4,229  from holding Vanguard Information Technology or generate 12.58% return on investment over 90 days.

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

Vanguard Information Technolog  vs.  Intermediate Government Bond

Vanguard Information

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Information Technology are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vanguard Information may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Intermediate Government

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intermediate Government Bond are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Intermediate Government 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 Information and Intermediate Government

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

The idea behind Vanguard Information Technology and Intermediate Government Bond 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.