Correlation Between Vanguard ESG and VanEck Vectors
Can any of the company-specific risk be diversified away by investing in both Vanguard ESG and VanEck Vectors 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 ESG and VanEck Vectors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard ESG Corporate and VanEck Vectors Moodys, you can compare the effects of market volatilities on Vanguard ESG and VanEck Vectors 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 ESG with a short position of VanEck Vectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard ESG and VanEck Vectors.
Diversification Opportunities for Vanguard ESG and VanEck Vectors
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and VanEck is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard ESG Corporate and VanEck Vectors Moodys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Vectors Moodys and Vanguard ESG 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 ESG Corporate are associated (or correlated) with VanEck Vectors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Vectors Moodys has no effect on the direction of Vanguard ESG i.e., Vanguard ESG and VanEck Vectors go up and down completely randomly.
Pair Corralation between Vanguard ESG and VanEck Vectors
Given the investment horizon of 90 days Vanguard ESG is expected to generate 1.01 times less return on investment than VanEck Vectors. In addition to that, Vanguard ESG is 1.03 times more volatile than VanEck Vectors Moodys. It trades about 0.03 of its total potential returns per unit of risk. VanEck Vectors Moodys is currently generating about 0.04 per unit of volatility. If you would invest 2,116 in VanEck Vectors Moodys on November 1, 2024 and sell it today you would earn a total of 15.50 from holding VanEck Vectors Moodys or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard ESG Corporate vs. VanEck Vectors Moodys
Performance |
| Timeline |
| Vanguard ESG Corporate |
| VanEck Vectors Moodys |
Vanguard ESG and VanEck Vectors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard ESG and VanEck Vectors
The main advantage of trading using opposite Vanguard ESG and VanEck Vectors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard ESG position performs unexpectedly, VanEck Vectors 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 Vectors will offset losses from the drop in VanEck Vectors' long position.| Vanguard ESG vs. Vanguard ESG International | Vanguard ESG vs. Vanguard ESG Stock | Vanguard ESG vs. Vanguard Total Corporate | Vanguard ESG vs. Vanguard Ultra Short Bond |
| VanEck Vectors vs. iShares iBonds Dec | VanEck Vectors vs. iShares 25 Year | VanEck Vectors vs. Aquagold International | VanEck Vectors vs. Barloworld Ltd ADR |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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