Correlation Between Vanguard Growth and VanEck ETF
Can any of the company-specific risk be diversified away by investing in both Vanguard Growth and VanEck ETF 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 Growth and VanEck ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Growth Index and VanEck ETF Trust, you can compare the effects of market volatilities on Vanguard Growth and VanEck ETF 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 Growth with a short position of VanEck ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Growth and VanEck ETF.
Diversification Opportunities for Vanguard Growth and VanEck ETF
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vanguard and VanEck is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Growth Index and VanEck ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck ETF Trust and Vanguard Growth 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 Growth Index are associated (or correlated) with VanEck ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck ETF Trust has no effect on the direction of Vanguard Growth i.e., Vanguard Growth and VanEck ETF go up and down completely randomly.
Pair Corralation between Vanguard Growth and VanEck ETF
Considering the 90-day investment horizon Vanguard Growth Index is expected to generate 1.12 times more return on investment than VanEck ETF. However, Vanguard Growth is 1.12 times more volatile than VanEck ETF Trust. It trades about -0.06 of its potential returns per unit of risk. VanEck ETF Trust is currently generating about -0.24 per unit of risk. If you would invest 41,293 in Vanguard Growth Index on November 28, 2024 and sell it today you would lose (559.00) from holding Vanguard Growth Index or give up 1.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Growth Index vs. VanEck ETF Trust
Performance |
| Timeline |
| Vanguard Growth Index |
| VanEck ETF Trust |
Vanguard Growth and VanEck ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Growth and VanEck ETF
The main advantage of trading using opposite Vanguard Growth and VanEck ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Growth position performs unexpectedly, VanEck ETF 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 ETF will offset losses from the drop in VanEck ETF's long position.| Vanguard Growth vs. Vanguard Value Index | Vanguard Growth vs. Vanguard Information Technology | Vanguard Growth vs. Vanguard Small Cap Growth | Vanguard Growth vs. Vanguard Dividend Appreciation |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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