Correlation Between Vanguard Emerging and Voya Vacs
Can any of the company-specific risk be diversified away by investing in both Vanguard Emerging and Voya Vacs 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 Voya Vacs 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 Voya Vacs Index, you can compare the effects of market volatilities on Vanguard Emerging and Voya Vacs 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 Voya Vacs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Emerging and Voya Vacs.
Diversification Opportunities for Vanguard Emerging and Voya Vacs
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Voya is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Emerging Markets and Voya Vacs Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Vacs Index 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 Voya Vacs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Vacs Index has no effect on the direction of Vanguard Emerging i.e., Vanguard Emerging and Voya Vacs go up and down completely randomly.
Pair Corralation between Vanguard Emerging and Voya Vacs
Assuming the 90 days horizon Vanguard Emerging is expected to generate 2.65 times less return on investment than Voya Vacs. But when comparing it to its historical volatility, Vanguard Emerging Markets is 1.03 times less risky than Voya Vacs. It trades about 0.02 of its potential returns per unit of risk. Voya Vacs Index is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,139 in Voya Vacs Index on November 4, 2024 and sell it today you would earn a total of 11.00 from holding Voya Vacs Index or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Emerging Markets vs. Voya Vacs Index
Performance |
| Timeline |
| Vanguard Emerging Markets |
| Voya Vacs Index |
Vanguard Emerging and Voya Vacs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Emerging and Voya Vacs
The main advantage of trading using opposite Vanguard Emerging and Voya Vacs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Emerging position performs unexpectedly, Voya Vacs 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 Voya Vacs will offset losses from the drop in Voya Vacs' long position.| Vanguard Emerging vs. Ambrus Core Bond | Vanguard Emerging vs. Touchstone Ultra Short | Vanguard Emerging vs. Chartwell Short Duration | Vanguard Emerging vs. Multisector Bond Sma |
| Voya Vacs vs. Wilmington Diversified Income | Voya Vacs vs. Global Diversified Income | Voya Vacs vs. Stone Ridge Diversified | Voya Vacs vs. Nasdaq 100 Fund Class |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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