Correlation Between Vanguard FTSE and EMQQ Emerging
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE and EMQQ Emerging 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 FTSE and EMQQ Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard FTSE Emerging and EMQQ The Emerging, you can compare the effects of market volatilities on Vanguard FTSE and EMQQ Emerging 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 FTSE with a short position of EMQQ Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and EMQQ Emerging.
Diversification Opportunities for Vanguard FTSE and EMQQ Emerging
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and EMQQ is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Emerging and EMQQ The Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMQQ The Emerging and Vanguard FTSE 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 FTSE Emerging are associated (or correlated) with EMQQ Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMQQ The Emerging has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and EMQQ Emerging go up and down completely randomly.
Pair Corralation between Vanguard FTSE and EMQQ Emerging
Considering the 90-day investment horizon Vanguard FTSE is expected to generate 1.37 times less return on investment than EMQQ Emerging. But when comparing it to its historical volatility, Vanguard FTSE Emerging is 1.56 times less risky than EMQQ Emerging. It trades about 0.05 of its potential returns per unit of risk. EMQQ The Emerging is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,156 in EMQQ The Emerging on August 26, 2024 and sell it today you would earn a total of 540.00 from holding EMQQ The Emerging or generate 17.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard FTSE Emerging vs. EMQQ The Emerging
Performance |
| Timeline |
| Vanguard FTSE Emerging |
| EMQQ The Emerging |
Vanguard FTSE and EMQQ Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and EMQQ Emerging
The main advantage of trading using opposite Vanguard FTSE and EMQQ Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE position performs unexpectedly, EMQQ Emerging 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 EMQQ Emerging will offset losses from the drop in EMQQ Emerging's long position.| Vanguard FTSE vs. Vanguard FTSE Developed | Vanguard FTSE vs. Vanguard Real Estate | Vanguard FTSE vs. Vanguard Small Cap Index | Vanguard FTSE vs. Vanguard Total Stock |
| EMQQ Emerging vs. Invesco China Technology | EMQQ Emerging vs. Amplify Online Retail | EMQQ Emerging vs. KraneShares CSI China | EMQQ Emerging 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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