Correlation Between Vanguard and VanEck Multi
Can any of the company-specific risk be diversified away by investing in both Vanguard 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 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 SP 500 and VanEck Multi Asset Conservative, you can compare the effects of market volatilities on Vanguard 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 with a short position of VanEck Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard and VanEck Multi.
Diversification Opportunities for Vanguard and VanEck Multi
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and VanEck is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard SP 500 and VanEck Multi Asset Conservativ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Multi Asset and Vanguard 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 SP 500 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 i.e., Vanguard and VanEck Multi go up and down completely randomly.
Pair Corralation between Vanguard and VanEck Multi
Assuming the 90 days trading horizon Vanguard SP 500 is expected to under-perform the VanEck Multi. In addition to that, Vanguard is 2.12 times more volatile than VanEck Multi Asset Conservative. It trades about -0.07 of its total potential returns per unit of risk. VanEck Multi Asset Conservative is currently generating about -0.1 per unit of volatility. If you would invest 5,944 in VanEck Multi Asset Conservative on January 31, 2024 and sell it today you would lose (46.00) from holding VanEck Multi Asset Conservative or give up 0.77% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Vanguard SP 500 vs. VanEck Multi Asset Conservativ
Performance |
Timeline |
Vanguard SP 500 |
VanEck Multi Asset |
Vanguard and VanEck Multi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vanguard and VanEck Multi
The main advantage of trading using opposite Vanguard and VanEck Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard 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 vs. Vanguard FTSE All World | Vanguard vs. iShares Core MSCI | Vanguard vs. Vanguard FTSE All World | Vanguard vs. Vanguard FTSE Emerging |
VanEck Multi vs. VanEck Multi Asset Growth | VanEck Multi vs. VanEck AMX UCITS | VanEck Multi vs. VanEck iBoxx EUR | VanEck Multi vs. VanEck iBoxx EUR |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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