Correlation Between Vanguard Growth and VanEck Indonesia
Can any of the company-specific risk be diversified away by investing in both Vanguard Growth and VanEck Indonesia 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 Indonesia 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 Indonesia Index, you can compare the effects of market volatilities on Vanguard Growth and VanEck Indonesia 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 Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Growth and VanEck Indonesia.
Diversification Opportunities for Vanguard Growth and VanEck Indonesia
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vanguard and VanEck is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Growth Index and VanEck Indonesia Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Indonesia Index 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 Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Indonesia Index has no effect on the direction of Vanguard Growth i.e., Vanguard Growth and VanEck Indonesia go up and down completely randomly.
Pair Corralation between Vanguard Growth and VanEck Indonesia
Considering the 90-day investment horizon Vanguard Growth Index is expected to generate 1.13 times more return on investment than VanEck Indonesia. However, Vanguard Growth is 1.13 times more volatile than VanEck Indonesia Index. It trades about 0.13 of its potential returns per unit of risk. VanEck Indonesia Index is currently generating about -0.25 per unit of risk. If you would invest 39,312 in Vanguard Growth Index on August 27, 2024 and sell it today you would earn a total of 1,158 from holding Vanguard Growth Index or generate 2.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Growth Index vs. VanEck Indonesia Index
Performance |
| Timeline |
| Vanguard Growth Index |
| VanEck Indonesia Index |
Vanguard Growth and VanEck Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Growth and VanEck Indonesia
The main advantage of trading using opposite Vanguard Growth and VanEck Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Growth position performs unexpectedly, VanEck Indonesia 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 Indonesia will offset losses from the drop in VanEck Indonesia'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 |
| VanEck Indonesia vs. iShares MSCI Thailand | VanEck Indonesia vs. iShares MSCI Chile | VanEck Indonesia vs. iShares MSCI Turkey | VanEck Indonesia vs. Global X MSCI |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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