Correlation Between VanEck 1 and VanEck MSCI
Can any of the company-specific risk be diversified away by investing in both VanEck 1 and VanEck MSCI 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 1 and VanEck MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck 1 5 Year and VanEck MSCI International, you can compare the effects of market volatilities on VanEck 1 and VanEck MSCI 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 1 with a short position of VanEck MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck 1 and VanEck MSCI.
Diversification Opportunities for VanEck 1 and VanEck MSCI
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between VanEck and VanEck is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding VanEck 1 5 Year and VanEck MSCI International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck MSCI International and VanEck 1 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 1 5 Year are associated (or correlated) with VanEck MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck MSCI International has no effect on the direction of VanEck 1 i.e., VanEck 1 and VanEck MSCI go up and down completely randomly.
Pair Corralation between VanEck 1 and VanEck MSCI
Assuming the 90 days trading horizon VanEck 1 is expected to generate 9.21 times less return on investment than VanEck MSCI. But when comparing it to its historical volatility, VanEck 1 5 Year is 4.29 times less risky than VanEck MSCI. It trades about 0.11 of its potential returns per unit of risk. VanEck MSCI International is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 3,070 in VanEck MSCI International on November 5, 2024 and sell it today you would earn a total of 123.00 from holding VanEck MSCI International or generate 4.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck 1 5 Year vs. VanEck MSCI International
Performance |
| Timeline |
| VanEck 1 5 |
| VanEck MSCI International |
VanEck 1 and VanEck MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck 1 and VanEck MSCI
The main advantage of trading using opposite VanEck 1 and VanEck MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck 1 position performs unexpectedly, VanEck MSCI 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 MSCI will offset losses from the drop in VanEck MSCI's long position.| VanEck 1 vs. VanEck Vectors Australian | VanEck 1 vs. VanEck FTSE China | VanEck 1 vs. VanEck MSCI International | VanEck 1 vs. VanEck Global Clean |
| VanEck MSCI vs. VanEck Vectors Australian | VanEck MSCI vs. VanEck FTSE China | VanEck MSCI vs. VanEck Global Clean | VanEck MSCI vs. VanEck MSCI Australian |
Check out your portfolio center.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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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