Correlation Between CYB and Vanguard ESG

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

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

Diversification Opportunities for CYB and Vanguard ESG

-0.71

Correlation Coefficient

CYB  Vanguard ESG

Pay attention - limited upside

The 3 months correlation between CYB and Vanguard is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding CYB and Vanguard ESG Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard ESG Stock and CYB 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 CYB are associated (or correlated) with Vanguard ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard ESG Stock has no effect on the direction of CYB i.e., CYB and Vanguard ESG go up and down completely randomly.

Pair Corralation between CYB and Vanguard ESG

If you would invest  9,067  in Vanguard ESG Stock on April 4, 2024 and sell it today you would earn a total of  683.00  from holding Vanguard ESG Stock or generate 7.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.61%
Values	Daily Returns

CYB  vs.  Vanguard ESG Stock

CYB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CYB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CYB is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vanguard ESG Stock

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard ESG Stock are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Vanguard ESG may actually be approaching a critical reversion point that can send shares even higher in August 2024.

Pair Trading with CYB and Vanguard ESG

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

The idea behind CYB and Vanguard ESG Stock 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.