Correlation Between Vanguard International and VanEck Vectors
Can any of the company-specific risk be diversified away by investing in both Vanguard International 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 International 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 International Equity and VanEck Vectors ETF, you can compare the effects of market volatilities on Vanguard International 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 International with a short position of VanEck Vectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard International and VanEck Vectors.
Diversification Opportunities for Vanguard International and VanEck Vectors
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and VanEck is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard International Equity and VanEck Vectors ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Vectors ETF and Vanguard International 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 International Equity 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 ETF has no effect on the direction of Vanguard International i.e., Vanguard International and VanEck Vectors go up and down completely randomly.
Pair Corralation between Vanguard International and VanEck Vectors
Assuming the 90 days trading horizon Vanguard International Equity is expected to generate 0.52 times more return on investment than VanEck Vectors. However, Vanguard International Equity is 1.94 times less risky than VanEck Vectors. It trades about 0.01 of its potential returns per unit of risk. VanEck Vectors ETF is currently generating about -0.3 per unit of risk. If you would invest 93,100 in Vanguard International Equity on September 1, 2024 and sell it today you would earn a total of 164.00 from holding Vanguard International Equity or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard International Equity vs. VanEck Vectors ETF
Performance |
| Timeline |
| Vanguard International |
| VanEck Vectors ETF |
Vanguard International and VanEck Vectors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard International and VanEck Vectors
The main advantage of trading using opposite Vanguard International and VanEck Vectors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard International 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 International vs. Vanguard Funds Public | Vanguard International vs. Vanguard Specialized Funds | Vanguard International vs. Vanguard World | Vanguard International vs. Vanguard Index Funds |
| VanEck Vectors vs. Promotora y Operadora | VanEck Vectors vs. UnitedHealth Group Incorporated | VanEck Vectors vs. Qulitas Controladora SAB | VanEck Vectors vs. Hoteles City Express |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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