Correlation Between Vanguard Small and Apple
Can any of the company-specific risk be diversified away by investing in both Vanguard Small and Apple 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 Small and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Small Cap Value and Apple Inc, you can compare the effects of market volatilities on Vanguard Small and Apple 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 Small with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small and Apple.
Diversification Opportunities for Vanguard Small and Apple
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vanguard and Apple is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Value and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Vanguard Small 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 Small Cap Value are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Vanguard Small i.e., Vanguard Small and Apple go up and down completely randomly.
Pair Corralation between Vanguard Small and Apple
Assuming the 90 days horizon Vanguard Small Cap Value is expected to under-perform the Apple. But the mutual fund apears to be less risky and, when comparing its historical volatility, Vanguard Small Cap Value is 1.51 times less risky than Apple. The mutual fund trades about -0.25 of its potential returns per unit of risk. The Apple Inc is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 17,137 in Apple Inc on January 21, 2024 and sell it today you would lose (637.00) from holding Apple Inc or give up 3.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vanguard Small Cap Value vs. Apple Inc
Performance |
| Timeline |
| Vanguard Small Cap |
| Apple Inc |
Vanguard Small and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small and Apple
The main advantage of trading using opposite Vanguard Small and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Vanguard Small vs. Vanguard Materials Index | Vanguard Small vs. Vanguard Limited Term Tax Exempt | Vanguard Small vs. Vanguard Limited Term Tax Exempt | Vanguard Small vs. Vanguard Global Minimum |
Check out your portfolio center.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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |