Correlation Between Vanguard Emerging and Bny Mellon

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

By analyzing existing cross correlation between Vanguard Emerging Markets and Bny Mellon Emerging, you can compare the effects of market volatilities on Vanguard Emerging and Bny Mellon 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 Emerging with a short position of Bny Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Emerging and Bny Mellon.

Diversification Opportunities for Vanguard Emerging and Bny Mellon

0.95

Correlation Coefficient

Vanguard Emerging  Bny Mellon

Almost no diversification

The 3 months correlation between Vanguard and Bny is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Emerging Markets and Bny Mellon Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bny Mellon Emerging and Vanguard Emerging 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 Emerging Markets are associated (or correlated) with Bny Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bny Mellon Emerging has no effect on the direction of Vanguard Emerging i.e., Vanguard Emerging and Bny Mellon go up and down completely randomly.

Pair Corralation between Vanguard Emerging and Bny Mellon

Assuming the 90 days horizon Vanguard Emerging Markets is expected to generate 1.14 times more return on investment than Bny Mellon. However, Vanguard Emerging is 1.14 times more volatile than Bny Mellon Emerging. It trades about 0.06 of its potential returns per unit of risk. Bny Mellon Emerging is currently generating about 0.01 per unit of risk. If you would invest  9,250  in Vanguard Emerging Markets on September 3, 2024 and sell it today you would earn a total of  316.00  from holding Vanguard Emerging Markets or generate 3.42% return on investment over 90 days.

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

Vanguard Emerging Markets  vs.  Bny Mellon Emerging

Vanguard Emerging Markets

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Emerging Markets are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Vanguard Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bny Mellon Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bny Mellon Emerging has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Bny Mellon 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 Emerging and Bny Mellon

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

The idea behind Vanguard Emerging Markets and Bny Mellon Emerging 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.