Correlation Between VanEck Short and Vanguard Total
Can any of the company-specific risk be diversified away by investing in both VanEck Short and Vanguard Total 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 VanEck Short and Vanguard Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Short Muni and Vanguard Total World, you can compare the effects of market volatilities on VanEck Short and Vanguard Total 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 VanEck Short with a short position of Vanguard Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Short and Vanguard Total.
Diversification Opportunities for VanEck Short and Vanguard Total
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between VanEck and Vanguard is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Short Muni and Vanguard Total World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total World and VanEck Short 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 VanEck Short Muni are associated (or correlated) with Vanguard Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total World has no effect on the direction of VanEck Short i.e., VanEck Short and Vanguard Total go up and down completely randomly.
Pair Corralation between VanEck Short and Vanguard Total
Considering the 90-day investment horizon VanEck Short Muni is expected to generate 0.2 times more return on investment than Vanguard Total. However, VanEck Short Muni is 4.98 times less risky than Vanguard Total. It trades about -0.02 of its potential returns per unit of risk. Vanguard Total World is currently generating about -0.15 per unit of risk. If you would invest 1,698 in VanEck Short Muni on January 25, 2024 and sell it today you would lose (1.00) from holding VanEck Short Muni or give up 0.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Short Muni vs. Vanguard Total World
Performance |
| Timeline |
| VanEck Short Muni |
| Vanguard Total World |
VanEck Short and Vanguard Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Short and Vanguard Total
The main advantage of trading using opposite VanEck Short and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Short position performs unexpectedly, Vanguard Total 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 Vanguard Total will offset losses from the drop in Vanguard Total's long position.| VanEck Short vs. iShares California Muni | VanEck Short vs. SCOR PK | VanEck Short vs. Morningstar Unconstrained Allocation | VanEck Short vs. High Yield Municipal Fund |
| Vanguard Total vs. SPDR MSCI EAFE | Vanguard Total vs. SPDR MSCI Emerging | Vanguard Total vs. SPDR MSCI USA | Vanguard Total vs. SPDR SP 1500 |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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