Correlation Between Vanguard and Ninepoint Energy

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

Diversification Opportunities for Vanguard and Ninepoint Energy

0.74

Correlation Coefficient

Vanguard  Ninepoint Energy

Poor diversification

The 3 months correlation between Vanguard and Ninepoint is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard SP 500 and Ninepoint Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ninepoint Energy 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 Ninepoint Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ninepoint Energy has no effect on the direction of Vanguard i.e., Vanguard and Ninepoint Energy go up and down completely randomly.

Pair Corralation between Vanguard and Ninepoint Energy

Assuming the 90 days trading horizon Vanguard SP 500 is expected to generate 0.68 times more return on investment than Ninepoint Energy. However, Vanguard SP 500 is 1.48 times less risky than Ninepoint Energy. It trades about 0.28 of its potential returns per unit of risk. Ninepoint Energy is currently generating about 0.1 per unit of risk. If you would invest  13,216  in Vanguard SP 500 on April 23, 2025 and sell it today you would earn a total of  2,090  from holding Vanguard SP 500 or generate 15.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Vanguard SP 500  vs.  Ninepoint Energy

Vanguard SP 500

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard SP 500 are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Vanguard displayed solid returns over the last few months and may actually be approaching a breakup point.

Ninepoint Energy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ninepoint Energy are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Ninepoint Energy may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Vanguard and Ninepoint Energy

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

The idea behind Vanguard SP 500 and Ninepoint Energy 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.