Correlation Between Vanguard FTSE and VanEck Multi
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE and VanEck Multi 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 VanEck Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard FTSE All World and VanEck Multi Asset Growth, you can compare the effects of market volatilities on Vanguard FTSE and VanEck Multi 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 VanEck Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and VanEck Multi.
Diversification Opportunities for Vanguard FTSE and VanEck Multi
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and VanEck is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE All World and VanEck Multi Asset Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Multi Asset 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 All World are associated (or correlated) with VanEck Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Multi Asset has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and VanEck Multi go up and down completely randomly.
Pair Corralation between Vanguard FTSE and VanEck Multi
Assuming the 90 days trading horizon Vanguard FTSE All World is expected to generate 1.28 times more return on investment than VanEck Multi. However, Vanguard FTSE is 1.28 times more volatile than VanEck Multi Asset Growth. It trades about 0.11 of its potential returns per unit of risk. VanEck Multi Asset Growth is currently generating about 0.08 per unit of risk. If you would invest 9,334 in Vanguard FTSE All World on September 2, 2024 and sell it today you would earn a total of 4,052 from holding Vanguard FTSE All World or generate 43.41% 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 All World vs. VanEck Multi Asset Growth
Performance |
| Timeline |
| Vanguard FTSE All |
| VanEck Multi Asset |
Vanguard FTSE and VanEck Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and VanEck Multi
The main advantage of trading using opposite Vanguard FTSE and VanEck Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE position performs unexpectedly, VanEck Multi 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 Multi will offset losses from the drop in VanEck Multi's long position.| Vanguard FTSE vs. Vanguard FTSE Developed | Vanguard FTSE vs. Vanguard FTSE All World | Vanguard FTSE vs. Vanguard FTSE Developed | Vanguard FTSE vs. Vanguard Funds PLC |
| VanEck Multi vs. iShares Core MSCI | VanEck Multi vs. BlackRock ESG Multi Asset | VanEck Multi vs. Pershing Square Holdings | VanEck Multi vs. ASML Holding NV |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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