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

0.0

Correlation Coefficient

Vanguard STAR  VanEck Vectors

Pay attention - limited upside

The 3 months correlation between Vanguard and VanEck is 0.0. 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

If you would invest  128,616  in Vanguard STAR Funds on December 22, 2024 and sell it today you would earn a total of  473.00  from holding Vanguard STAR Funds or generate 0.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Vanguard STAR Funds  vs.  VanEck Vectors ETF

Vanguard STAR Funds

Risk-Adjusted Performance

Very Weak

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

VanEck Vectors ETF

Risk-Adjusted Performance

Very Weak

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

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.

The idea behind Vanguard STAR Funds and VanEck Vectors ETF 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.