Correlation Between Vanguard Total and Black Oak

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

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

Diversification Opportunities for Vanguard Total and Black Oak

-0.13

Correlation Coefficient

Vanguard Total  Black Oak

Good diversification

The 3 months correlation between Vanguard and Black is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Bond and Black Oak Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Oak Emerging and Vanguard Total 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 Total Bond are associated (or correlated) with Black Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Oak Emerging has no effect on the direction of Vanguard Total i.e., Vanguard Total and Black Oak go up and down completely randomly.

Pair Corralation between Vanguard Total and Black Oak

Considering the 90-day investment horizon Vanguard Total is expected to generate 60.76 times less return on investment than Black Oak. But when comparing it to its historical volatility, Vanguard Total Bond is 6.63 times less risky than Black Oak. It trades about 0.01 of its potential returns per unit of risk. Black Oak Emerging is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  683.00  in Black Oak Emerging on March 8, 2025 and sell it today you would earn a total of  77.00  from holding Black Oak Emerging or generate 11.27% return on investment over 90 days.

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

Vanguard Total Bond  vs.  Black Oak Emerging

Vanguard Total Bond

Risk-Adjusted Performance

Weak

Over the last 90 days Vanguard Total Bond has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Vanguard Total is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Black Oak Emerging

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Black Oak Emerging are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Black Oak showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vanguard Total and Black Oak

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

The idea behind Vanguard Total Bond and Black Oak Emerging 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..