Correlation Between VanEck Vectors and Vanguard Total
Can any of the company-specific risk be diversified away by investing in both VanEck Vectors 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 Vectors 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 Vectors ETF and Vanguard Total World, you can compare the effects of market volatilities on VanEck Vectors 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 Vectors with a short position of Vanguard Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Vectors and Vanguard Total.
Diversification Opportunities for VanEck Vectors and Vanguard Total
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between VanEck and Vanguard is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vectors 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 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 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 Vectors i.e., VanEck Vectors and Vanguard Total go up and down completely randomly.
Pair Corralation between VanEck Vectors and Vanguard Total
Given the investment horizon of 90 days VanEck Vectors ETF is expected to generate 1.24 times more return on investment than Vanguard Total. However, VanEck Vectors is 1.24 times more volatile than Vanguard Total World. It trades about 0.13 of its potential returns per unit of risk. Vanguard Total World is currently generating about 0.16 per unit of risk. If you would invest 3,910 in VanEck Vectors ETF on September 13, 2024 and sell it today you would earn a total of 57.00 from holding VanEck Vectors ETF or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Vectors ETF vs. Vanguard Total World
Performance |
| Timeline |
| VanEck Vectors ETF |
| Vanguard Total World |
VanEck Vectors and Vanguard Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Vectors and Vanguard Total
The main advantage of trading using opposite VanEck Vectors and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Vectors 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 Vectors vs. Vanguard Total World | VanEck Vectors vs. iShares MSCI ACWI | VanEck Vectors vs. iShares Global 100 | VanEck Vectors vs. iShares MSCI World |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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