Correlation Between Vanguard Emerging and Dreyfus Diversified
Can any of the company-specific risk be diversified away by investing in both Vanguard Emerging and Dreyfus Diversified 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 Emerging and Dreyfus Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Emerging Markets and Dreyfus Diversified Emerging, you can compare the effects of market volatilities on Vanguard Emerging and Dreyfus Diversified 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 Emerging with a short position of Dreyfus Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Emerging and Dreyfus Diversified.
Diversification Opportunities for Vanguard Emerging and Dreyfus Diversified
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Dreyfus is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Emerging Markets and Dreyfus Diversified Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Diversified and Vanguard Emerging 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 Emerging Markets are associated (or correlated) with Dreyfus Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Diversified has no effect on the direction of Vanguard Emerging i.e., Vanguard Emerging and Dreyfus Diversified go up and down completely randomly.
Pair Corralation between Vanguard Emerging and Dreyfus Diversified
If you would invest 3,269 in Vanguard Emerging Markets on August 29, 2024 and sell it today you would earn a total of 498.00 from holding Vanguard Emerging Markets or generate 15.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Vanguard Emerging Markets vs. Dreyfus Diversified Emerging
Performance |
| Timeline |
| Vanguard Emerging Markets |
| Dreyfus Diversified |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Vanguard Emerging and Dreyfus Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Emerging and Dreyfus Diversified
The main advantage of trading using opposite Vanguard Emerging and Dreyfus Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Emerging position performs unexpectedly, Dreyfus Diversified 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 Dreyfus Diversified will offset losses from the drop in Dreyfus Diversified's long position.| Vanguard Emerging vs. Vanguard Developed Markets | Vanguard Emerging vs. Vanguard Reit Index | Vanguard Emerging vs. Vanguard Small Cap Index | Vanguard Emerging vs. Vanguard European Stock |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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