Correlation Between VanEck Global and Vanguard FTSE

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

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

Diversification Opportunities for VanEck Global and Vanguard FTSE

0.35

Correlation Coefficient

VanEck Global  Vanguard FTSE

Weak diversification

The 3 months correlation between VanEck and Vanguard is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Global Real and Vanguard FTSE North in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard FTSE North and VanEck Global 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 VanEck Global Real are associated (or correlated) with Vanguard FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard FTSE North has no effect on the direction of VanEck Global i.e., VanEck Global and Vanguard FTSE go up and down completely randomly.

Pair Corralation between VanEck Global and Vanguard FTSE

Assuming the 90 days trading horizon VanEck Global is expected to generate 19.49 times less return on investment than Vanguard FTSE. But when comparing it to its historical volatility, VanEck Global Real is 1.22 times less risky than Vanguard FTSE. It trades about 0.02 of its potential returns per unit of risk. Vanguard FTSE North is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  11,182  in Vanguard FTSE North on April 22, 2025 and sell it today you would earn a total of  2,012  from holding Vanguard FTSE North or generate 17.99% return on investment over 90 days.

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

VanEck Global Real  vs.  Vanguard FTSE North

VanEck Global Real

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Global Real are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, VanEck Global is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Vanguard FTSE North

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard FTSE North are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Vanguard FTSE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VanEck Global and Vanguard FTSE

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

The idea behind VanEck Global Real and Vanguard FTSE North 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.