Correlation Between Vanguard Growth and WisdomTree Inflation

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

Diversification Opportunities for Vanguard Growth and WisdomTree Inflation

0.0

Correlation Coefficient

Vanguard Growth  WisdomTree Inflation

Pay attention - limited upside

The 3 months correlation between Vanguard and WisdomTree is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Growth Index and WisdomTree Inflation Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Inflation Plus 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 WisdomTree Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Inflation Plus has no effect on the direction of Vanguard Growth i.e., Vanguard Growth and WisdomTree Inflation go up and down completely randomly.

Pair Corralation between Vanguard Growth and WisdomTree Inflation

If you would invest  41,501  in Vanguard Growth Index on May 17, 2025 and sell it today you would earn a total of  4,785  from holding Vanguard Growth Index or generate 11.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

Vanguard Growth Index  vs.  WisdomTree Inflation Plus

Vanguard Growth Index

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Growth Index are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Vanguard Growth may actually be approaching a critical reversion point that can send shares even higher in September 2025.

WisdomTree Inflation Plus

Risk-Adjusted Performance

Weak

Over the last 90 days WisdomTree Inflation Plus has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, WisdomTree Inflation is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Vanguard Growth and WisdomTree Inflation

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

The idea behind Vanguard Growth Index and WisdomTree Inflation Plus 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.