Correlation Between VanEck Intermediate and Vanguard Intermediate
Can any of the company-specific risk be diversified away by investing in both VanEck Intermediate and Vanguard Intermediate 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 Intermediate and Vanguard Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Intermediate Muni and Vanguard Intermediate Term Tax Exempt, you can compare the effects of market volatilities on VanEck Intermediate and Vanguard Intermediate 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 Intermediate with a short position of Vanguard Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Intermediate and Vanguard Intermediate.
Diversification Opportunities for VanEck Intermediate and Vanguard Intermediate
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VanEck and Vanguard is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Intermediate Muni and Vanguard Intermediate Term Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Intermediate and VanEck Intermediate 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 Intermediate Muni are associated (or correlated) with Vanguard Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Intermediate has no effect on the direction of VanEck Intermediate i.e., VanEck Intermediate and Vanguard Intermediate go up and down completely randomly.
Pair Corralation between VanEck Intermediate and Vanguard Intermediate
Considering the 90-day investment horizon VanEck Intermediate Muni is expected to under-perform the Vanguard Intermediate. In addition to that, VanEck Intermediate is 1.34 times more volatile than Vanguard Intermediate Term Tax Exempt. It trades about -0.07 of its total potential returns per unit of risk. Vanguard Intermediate Term Tax Exempt is currently generating about -0.05 per unit of volatility. If you would invest 10,055 in Vanguard Intermediate Term Tax Exempt on August 25, 2024 and sell it today you would lose (51.00) from holding Vanguard Intermediate Term Tax Exempt or give up 0.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Intermediate Muni vs. Vanguard Intermediate Term Tax
Performance |
| Timeline |
| VanEck Intermediate Muni |
| Vanguard Intermediate |
VanEck Intermediate and Vanguard Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Intermediate and Vanguard Intermediate
The main advantage of trading using opposite VanEck Intermediate and Vanguard Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Intermediate position performs unexpectedly, Vanguard Intermediate 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 Intermediate will offset losses from the drop in Vanguard Intermediate's long position.| VanEck Intermediate vs. BlackRock Intermediate Muni | VanEck Intermediate vs. SSGA Active Trust | VanEck Intermediate vs. SPDR MarketAxess Investment | VanEck Intermediate vs. SSGA Active Trust |
| Vanguard Intermediate vs. SSGA Active Trust | Vanguard Intermediate vs. SPDR Nuveen Municipal | Vanguard Intermediate vs. Xtrackers California Municipal | Vanguard Intermediate vs. iShares Short Maturity |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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