Correlation Between Leverage Shares and Vaneck Vectors
Can any of the company-specific risk be diversified away by investing in both Leverage Shares and Vaneck Vectors 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 Leverage Shares and Vaneck Vectors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leverage Shares 3x and Vaneck Vectors UCITS, you can compare the effects of market volatilities on Leverage Shares and Vaneck Vectors 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 Leverage Shares with a short position of Vaneck Vectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leverage Shares and Vaneck Vectors.
Diversification Opportunities for Leverage Shares and Vaneck Vectors
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Leverage and Vaneck is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 3x and Vaneck Vectors UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaneck Vectors UCITS and Leverage Shares 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 Leverage Shares 3x are associated (or correlated) with Vaneck Vectors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaneck Vectors UCITS has no effect on the direction of Leverage Shares i.e., Leverage Shares and Vaneck Vectors go up and down completely randomly.
Pair Corralation between Leverage Shares and Vaneck Vectors
Assuming the 90 days trading horizon Leverage Shares 3x is expected to generate 121.86 times more return on investment than Vaneck Vectors. However, Leverage Shares is 121.86 times more volatile than Vaneck Vectors UCITS. It trades about 0.08 of its potential returns per unit of risk. Vaneck Vectors UCITS is currently generating about 0.04 per unit of risk. If you would invest 2.33 in Leverage Shares 3x on September 4, 2024 and sell it today you would earn a total of 255,638 from holding Leverage Shares 3x or generate 1.097157382E7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Leverage Shares 3x vs. Vaneck Vectors UCITS
Performance |
| Timeline |
| Leverage Shares 3x |
| Vaneck Vectors UCITS |
Leverage Shares and Vaneck Vectors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leverage Shares and Vaneck Vectors
The main advantage of trading using opposite Leverage Shares and Vaneck Vectors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leverage Shares position performs unexpectedly, Vaneck Vectors 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 Vectors will offset losses from the drop in Vaneck Vectors' long position.| Leverage Shares vs. Vanguard FTSE Developed | Leverage Shares vs. Leverage Shares 2x | Leverage Shares vs. Amundi Index Solutions | Leverage Shares vs. Amundi Index Solutions |
| Vaneck Vectors vs. Leverage Shares 3x | Vaneck Vectors vs. WisdomTree Natural Gas | Vaneck Vectors vs. SP 500 VIX | Vaneck Vectors vs. Leverage Shares 3x |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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