Correlation Between Vanguard Value and T Rex

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

By analyzing existing cross correlation between Vanguard Value Index and T Rex 2X Long, you can compare the effects of market volatilities on Vanguard Value and T Rex 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 Value with a short position of T Rex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Value and T Rex.

Diversification Opportunities for Vanguard Value and T Rex

-0.81

Correlation Coefficient

Vanguard Value  T Rex

Pay attention - limited upside

The 3 months correlation between Vanguard and DJTU is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Value Index and T Rex 2X Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rex 2X and Vanguard Value 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 Value Index are associated (or correlated) with T Rex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rex 2X has no effect on the direction of Vanguard Value i.e., Vanguard Value and T Rex go up and down completely randomly.

Pair Corralation between Vanguard Value and T Rex

Considering the 90-day investment horizon Vanguard Value Index is expected to generate 0.12 times more return on investment than T Rex. However, Vanguard Value Index is 8.68 times less risky than T Rex. It trades about 0.15 of its potential returns per unit of risk. T Rex 2X Long is currently generating about -0.2 per unit of risk. If you would invest  16,670  in Vanguard Value Index on May 7, 2025 and sell it today you would earn a total of  1,048  from holding Vanguard Value Index or generate 6.29% return on investment over 90 days.

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

Vanguard Value Index  vs.  T Rex 2X Long

Vanguard Value Index

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Value Index are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Vanguard Value may actually be approaching a critical reversion point that can send shares even higher in September 2025.

T Rex 2X

Risk-Adjusted Performance

Very Weak

Over the last 90 days T Rex 2X Long has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Pair Trading with Vanguard Value and T Rex

The main advantage of trading using opposite Vanguard Value and T Rex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Value position performs unexpectedly, T Rex 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 T Rex will offset losses from the drop in T Rex's long position.

The idea behind Vanguard Value Index and T Rex 2X Long 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.