Correlation Between Vanguard Target and One Choice

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

By analyzing existing cross correlation between Vanguard Target Retirement and One Choice 2035, you can compare the effects of market volatilities on Vanguard Target and One Choice 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 Target with a short position of One Choice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Target and One Choice.

Diversification Opportunities for Vanguard Target and One Choice

0.99

Correlation Coefficient

Vanguard Target  One Choice

No risk reduction

The 3 months correlation between Vanguard and One is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Target Retirement and One Choice 2035 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Choice 2035 and Vanguard Target 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 Target Retirement are associated (or correlated) with One Choice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Choice 2035 has no effect on the direction of Vanguard Target i.e., Vanguard Target and One Choice go up and down completely randomly.

Pair Corralation between Vanguard Target and One Choice

Assuming the 90 days horizon Vanguard Target Retirement is expected to generate 1.13 times more return on investment than One Choice. However, Vanguard Target is 1.13 times more volatile than One Choice 2035. It trades about 0.27 of its potential returns per unit of risk. One Choice 2035 is currently generating about 0.22 per unit of risk. If you would invest  2,597  in Vanguard Target Retirement on July 7, 2025 and sell it today you would earn a total of  172.00  from holding Vanguard Target Retirement or generate 6.62% return on investment over 90 days.

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

Vanguard Target Retirement  vs.  One Choice 2035

Vanguard Target Reti

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Target Retirement are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical indicators, Vanguard Target is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

One Choice 2035

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in One Choice 2035 are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, One Choice 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 Target and One Choice

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

The idea behind Vanguard Target Retirement and One Choice 2035 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.