Correlation Between Vanguard and VanEck Solana

Can any of the company-specific risk be diversified away by investing in both Vanguard and VanEck Solana 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 Solana 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 Solana ETN, you can compare the effects of market volatilities on Vanguard and VanEck Solana 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 Solana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard and VanEck Solana.

Diversification Opportunities for Vanguard and VanEck Solana

0.81

Correlation Coefficient

Vanguard  VanEck Solana

Very poor diversification

The 3 months correlation between Vanguard and VanEck is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard SP 500 and VanEck Solana ETN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Solana ETN 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 Solana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Solana ETN has no effect on the direction of Vanguard i.e., Vanguard and VanEck Solana go up and down completely randomly.

Pair Corralation between Vanguard and VanEck Solana

Assuming the 90 days trading horizon Vanguard SP 500 is expected to generate 0.15 times more return on investment than VanEck Solana. However, Vanguard SP 500 is 6.5 times less risky than VanEck Solana. It trades about -0.11 of its potential returns per unit of risk. VanEck Solana ETN is currently generating about -0.05 per unit of risk. If you would invest  10,150  in Vanguard SP 500 on December 30, 2024 and sell it today you would lose (815.00) from holding Vanguard SP 500 or give up 8.03% of portfolio value over 90 days.

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

Vanguard SP 500  vs.  VanEck Solana ETN

Vanguard SP 500

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vanguard SP 500 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Etf's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the fund sophisticated investors.

VanEck Solana ETN

Risk-Adjusted Performance

Very Weak

Over the last 90 days VanEck Solana ETN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Etf's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the fund sophisticated investors.

Pair Trading with Vanguard and VanEck Solana

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

The idea behind Vanguard SP 500 and VanEck Solana ETN 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.