Correlation Between NEOS Nasdaq and Vanguard Long-term

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

By analyzing existing cross correlation between NEOS Nasdaq 100 and Vanguard Long Term Treasury, you can compare the effects of market volatilities on NEOS Nasdaq and Vanguard Long-term 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 NEOS Nasdaq with a short position of Vanguard Long-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEOS Nasdaq and Vanguard Long-term.

Diversification Opportunities for NEOS Nasdaq and Vanguard Long-term

0.58

Correlation Coefficient

NEOS Nasdaq  Vanguard Long-term

Very weak diversification

The 3 months correlation between NEOS and Vanguard is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding NEOS Nasdaq 100 and Vanguard Long Term Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Long Term and NEOS Nasdaq 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 NEOS Nasdaq 100 are associated (or correlated) with Vanguard Long-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Long Term has no effect on the direction of NEOS Nasdaq i.e., NEOS Nasdaq and Vanguard Long-term go up and down completely randomly.

Pair Corralation between NEOS Nasdaq and Vanguard Long-term

Given the investment horizon of 90 days NEOS Nasdaq 100 is expected to generate 1.83 times more return on investment than Vanguard Long-term. However, NEOS Nasdaq is 1.83 times more volatile than Vanguard Long Term Treasury. It trades about 0.12 of its potential returns per unit of risk. Vanguard Long Term Treasury is currently generating about 0.01 per unit of risk. If you would invest  5,153  in NEOS Nasdaq 100 on September 6, 2025 and sell it today you would earn a total of  340.00  from holding NEOS Nasdaq 100 or generate 6.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

NEOS Nasdaq 100  vs.  Vanguard Long Term Treasury

NEOS Nasdaq 100

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in NEOS Nasdaq 100 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, NEOS Nasdaq may actually be approaching a critical reversion point that can send shares even higher in January 2026.

Vanguard Long Term

Risk-Adjusted Performance

Weakest

Over the last 90 days Vanguard Long Term Treasury has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Vanguard Long-term is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with NEOS Nasdaq and Vanguard Long-term

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

The idea behind NEOS Nasdaq 100 and Vanguard Long Term Treasury 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.