Correlation Between Vanguard Global and VanEck Global
Can any of the company-specific risk be diversified away by investing in both Vanguard Global and VanEck Global 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 Global and VanEck Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Global Infrastructure and VanEck Global Listed, you can compare the effects of market volatilities on Vanguard Global and VanEck Global 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 Global with a short position of VanEck Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Global and VanEck Global.
Diversification Opportunities for Vanguard Global and VanEck Global
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vanguard and VanEck is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Global Infrastructure and VanEck Global Listed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Global Listed and Vanguard Global 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 Global Infrastructure are associated (or correlated) with VanEck Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Global Listed has no effect on the direction of Vanguard Global i.e., Vanguard Global and VanEck Global go up and down completely randomly.
Pair Corralation between Vanguard Global and VanEck Global
Assuming the 90 days trading horizon Vanguard Global is expected to generate 4.1 times less return on investment than VanEck Global. But when comparing it to its historical volatility, Vanguard Global Infrastructure is 1.34 times less risky than VanEck Global. It trades about 0.04 of its potential returns per unit of risk. VanEck Global Listed is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,344 in VanEck Global Listed on September 13, 2024 and sell it today you would earn a total of 1,269 from holding VanEck Global Listed or generate 94.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Global Infrastructure vs. VanEck Global Listed
Performance |
| Timeline |
| Vanguard Global Infr |
| VanEck Global Listed |
Vanguard Global and VanEck Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Global and VanEck Global
The main advantage of trading using opposite Vanguard Global and VanEck Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Global position performs unexpectedly, VanEck Global 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 VanEck Global will offset losses from the drop in VanEck Global's long position.| Vanguard Global vs. Betashares Asia Technology | Vanguard Global vs. BetaShares Australia 200 | Vanguard Global vs. Australian High Interest | Vanguard Global vs. Vanguard Australian Shares |
| VanEck Global vs. VanEck Vectors Australian | VanEck Global vs. VanEck FTSE China | VanEck Global vs. VanEck MSCI International | VanEck Global vs. VanEck Global Clean |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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