Correlation Between VanEck Vectors and Vanguard Consumer
Can any of the company-specific risk be diversified away by investing in both VanEck Vectors and Vanguard Consumer 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 Vectors and Vanguard Consumer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Vectors ETF and Vanguard Consumer Staples, you can compare the effects of market volatilities on VanEck Vectors and Vanguard Consumer 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 Vectors with a short position of Vanguard Consumer. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Vectors and Vanguard Consumer.
Diversification Opportunities for VanEck Vectors and Vanguard Consumer
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VanEck and Vanguard is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vectors ETF and Vanguard Consumer Staples in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Consumer Staples and VanEck Vectors 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 Vectors ETF are associated (or correlated) with Vanguard Consumer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Consumer Staples has no effect on the direction of VanEck Vectors i.e., VanEck Vectors and Vanguard Consumer go up and down completely randomly.
Pair Corralation between VanEck Vectors and Vanguard Consumer
Given the investment horizon of 90 days VanEck Vectors is expected to generate 4.98 times less return on investment than Vanguard Consumer. In addition to that, VanEck Vectors is 2.47 times more volatile than Vanguard Consumer Staples. It trades about 0.02 of its total potential returns per unit of risk. Vanguard Consumer Staples is currently generating about 0.25 per unit of volatility. If you would invest 21,548 in Vanguard Consumer Staples on September 13, 2024 and sell it today you would earn a total of 588.00 from holding Vanguard Consumer Staples or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Vectors ETF vs. Vanguard Consumer Staples
Performance |
| Timeline |
| VanEck Vectors ETF |
| Vanguard Consumer Staples |
VanEck Vectors and Vanguard Consumer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Vectors and Vanguard Consumer
The main advantage of trading using opposite VanEck Vectors and Vanguard Consumer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Vectors position performs unexpectedly, Vanguard Consumer 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 Consumer will offset losses from the drop in Vanguard Consumer's long position.| VanEck Vectors vs. Gogoro Inc | VanEck Vectors vs. Global X Disruptive | VanEck Vectors vs. Gulf Island Fabrication | VanEck Vectors vs. VanEck Green Bond |
| Vanguard Consumer vs. Vanguard Consumer Discretionary | Vanguard Consumer vs. Vanguard Utilities Index | Vanguard Consumer vs. Vanguard Industrials Index | Vanguard Consumer vs. Vanguard Materials Index |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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