Correlation Between Vanguard Value and Al Frank

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

Diversification Opportunities for Vanguard Value and Al Frank

0.99

Correlation Coefficient

Vanguard Value  Al Frank

No risk reduction

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

Pair Corralation between Vanguard Value and Al Frank

Assuming the 90 days horizon Vanguard Value is expected to generate 1.88 times less return on investment than Al Frank. But when comparing it to its historical volatility, Vanguard Value Index is 1.19 times less risky than Al Frank. It trades about 0.19 of its potential returns per unit of risk. Al Frank Fund is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  2,398  in Al Frank Fund on April 30, 2025 and sell it today you would earn a total of  387.00  from holding Al Frank Fund or generate 16.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Vanguard Value Index  vs.  Al Frank Fund

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 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vanguard Value may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Al Frank Fund

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Al Frank Fund are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Al Frank showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vanguard Value and Al Frank

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

The idea behind Vanguard Value Index and Al Frank Fund 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.