Correlation Between Vanguard Communication and VanEck Video

Can any of the company-specific risk be diversified away by investing in both Vanguard Communication and VanEck Video 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 Communication and VanEck Video into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vanguard Communication Services and VanEck Video Gaming, you can compare the effects of market volatilities on Vanguard Communication and VanEck Video 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 Communication with a short position of VanEck Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Communication and VanEck Video.

Diversification Opportunities for Vanguard Communication and VanEck Video

0.38

Correlation Coefficient

Vanguard Communication  VanEck Video

Weak diversification

The 3 months correlation between Vanguard and VanEck is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Communication Service and VanEck Video Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Video Gaming and Vanguard Communication 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 Communication Services are associated (or correlated) with VanEck Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Video Gaming has no effect on the direction of Vanguard Communication i.e., Vanguard Communication and VanEck Video go up and down completely randomly.

Pair Corralation between Vanguard Communication and VanEck Video

Considering the 90-day investment horizon Vanguard Communication Services is expected to under-perform the VanEck Video. But the etf apears to be less risky and, when comparing its historical volatility, Vanguard Communication Services is 1.19 times less risky than VanEck Video. The etf trades about -0.06 of its potential returns per unit of risk. The VanEck Video Gaming is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  8,409  in VanEck Video Gaming on December 29, 2024 and sell it today you would earn a total of  365.00  from holding VanEck Video Gaming or generate 4.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Vanguard Communication Service  vs.  VanEck Video Gaming

Vanguard Communication

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vanguard Communication Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Vanguard Communication is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

VanEck Video Gaming

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Video Gaming are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, VanEck Video is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Vanguard Communication and VanEck Video

The main advantage of trading using opposite Vanguard Communication and VanEck Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Communication position performs unexpectedly, VanEck Video 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 Video will offset losses from the drop in VanEck Video's long position.

The idea behind Vanguard Communication Services and VanEck Video Gaming pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.