Correlation Between Vanguard STAR and VanEck Vectors
Can any of the company-specific risk be diversified away by investing in both Vanguard STAR 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 STAR 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 STAR Funds and VanEck Vectors ETF, you can compare the effects of market volatilities on Vanguard STAR 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 STAR with a short position of VanEck Vectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard STAR and VanEck Vectors.
Diversification Opportunities for Vanguard STAR and VanEck Vectors
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vanguard and VanEck is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard STAR Funds 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 STAR 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 STAR Funds 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 STAR i.e., Vanguard STAR and VanEck Vectors go up and down completely randomly.
Pair Corralation between Vanguard STAR and VanEck Vectors
Assuming the 90 days trading horizon Vanguard STAR Funds is expected to generate 0.21 times more return on investment than VanEck Vectors. However, Vanguard STAR Funds is 4.86 times less risky than VanEck Vectors. It trades about -0.1 of its potential returns per unit of risk. VanEck Vectors ETF is currently generating about -0.22 per unit of risk. If you would invest 124,976 in Vanguard STAR Funds on September 3, 2024 and sell it today you would lose (936.00) from holding Vanguard STAR Funds or give up 0.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard STAR Funds vs. VanEck Vectors ETF
Performance |
| Timeline |
| Vanguard STAR Funds |
| VanEck Vectors ETF |
Vanguard STAR and VanEck Vectors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard STAR and VanEck Vectors
The main advantage of trading using opposite Vanguard STAR and VanEck Vectors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard STAR 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 STAR vs. Vanguard Index Funds | Vanguard STAR vs. Vanguard Index Funds | Vanguard STAR vs. SPDR SP 500 | Vanguard STAR vs. iShares Trust |
| VanEck Vectors vs. Vanguard Index Funds | VanEck Vectors vs. Vanguard Index Funds | VanEck Vectors vs. Vanguard STAR Funds | VanEck Vectors vs. SPDR SP 500 |
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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