Correlation Between VanEck ChiNext and Vanguard Total
Can any of the company-specific risk be diversified away by investing in both VanEck ChiNext and Vanguard Total 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 VanEck ChiNext and Vanguard Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck ChiNext ETF and Vanguard Total World, you can compare the effects of market volatilities on VanEck ChiNext and Vanguard Total 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 VanEck ChiNext with a short position of Vanguard Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck ChiNext and Vanguard Total.
Diversification Opportunities for VanEck ChiNext and Vanguard Total
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VanEck and Vanguard is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding VanEck ChiNext ETF and Vanguard Total World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total World and VanEck ChiNext 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 VanEck ChiNext ETF are associated (or correlated) with Vanguard Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total World has no effect on the direction of VanEck ChiNext i.e., VanEck ChiNext and Vanguard Total go up and down completely randomly.
Pair Corralation between VanEck ChiNext and Vanguard Total
Given the investment horizon of 90 days VanEck ChiNext ETF is expected to generate 6.35 times more return on investment than Vanguard Total. However, VanEck ChiNext is 6.35 times more volatile than Vanguard Total World. It trades about 0.04 of its potential returns per unit of risk. Vanguard Total World is currently generating about 0.27 per unit of risk. If you would invest 2,889 in VanEck ChiNext ETF on September 1, 2024 and sell it today you would earn a total of 63.00 from holding VanEck ChiNext ETF or generate 2.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
VanEck ChiNext ETF vs. Vanguard Total World
Performance |
| Timeline |
| VanEck ChiNext ETF |
| Vanguard Total World |
VanEck ChiNext and Vanguard Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck ChiNext and Vanguard Total
The main advantage of trading using opposite VanEck ChiNext and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck ChiNext position performs unexpectedly, Vanguard Total 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 Total will offset losses from the drop in Vanguard Total's long position.| VanEck ChiNext vs. FT Vest Equity | VanEck ChiNext vs. Northern Lights | VanEck ChiNext vs. Dimensional International High | VanEck ChiNext vs. Matthews China Discovery |
| Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Total Stock | Vanguard Total vs. Vanguard Total Bond | Vanguard Total vs. Vanguard FTSE Emerging |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |