Correlation Between Cardano and VanEck Global
Can any of the company-specific risk be diversified away by investing in both Cardano and VanEck Global 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 Cardano and VanEck Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardano and VanEck Global Listed, you can compare the effects of market volatilities on Cardano and VanEck Global 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 Cardano with a short position of VanEck Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and VanEck Global.
Diversification Opportunities for Cardano and VanEck Global
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cardano and VanEck is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and VanEck Global Listed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Global Listed and Cardano 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 Cardano are associated (or correlated) with VanEck Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Global Listed has no effect on the direction of Cardano i.e., Cardano and VanEck Global go up and down completely randomly.
Pair Corralation between Cardano and VanEck Global
Assuming the 90 days trading horizon Cardano is expected to generate 6.04 times more return on investment than VanEck Global. However, Cardano is 6.04 times more volatile than VanEck Global Listed. It trades about 0.16 of its potential returns per unit of risk. VanEck Global Listed is currently generating about 0.22 per unit of risk. If you would invest 95.00 in Cardano on October 20, 2024 and sell it today you would earn a total of 19.00 from holding Cardano or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.91% |
| Values | Daily Returns |
Cardano vs. VanEck Global Listed
Performance |
| Timeline |
| Cardano |
| VanEck Global Listed |
Cardano and VanEck Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardano and VanEck Global
The main advantage of trading using opposite Cardano and VanEck Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardano position performs unexpectedly, VanEck Global 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 Global will offset losses from the drop in VanEck Global's long position.The idea behind Cardano and VanEck Global Listed 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.| VanEck Global vs. VanEck Vectors Australian | VanEck Global vs. VanEck FTSE China | VanEck Global vs. VanEck MSCI International | VanEck Global vs. VanEck Global Clean |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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