Correlation Between VanEck Africa and EGPT
Can any of the company-specific risk be diversified away by investing in both VanEck Africa and EGPT 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 Africa and EGPT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Africa Index and EGPT, you can compare the effects of market volatilities on VanEck Africa and EGPT 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 Africa with a short position of EGPT. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Africa and EGPT.
Diversification Opportunities for VanEck Africa and EGPT
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VanEck and EGPT is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Africa Index and EGPT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EGPT and VanEck Africa 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 Africa Index are associated (or correlated) with EGPT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EGPT has no effect on the direction of VanEck Africa i.e., VanEck Africa and EGPT go up and down completely randomly.
Pair Corralation between VanEck Africa and EGPT
If you would invest 1,562 in VanEck Africa Index on September 2, 2024 and sell it today you would earn a total of 51.00 from holding VanEck Africa Index or generate 3.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
VanEck Africa Index vs. EGPT
Performance |
| Timeline |
| VanEck Africa Index |
| EGPT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
VanEck Africa and EGPT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Africa and EGPT
The main advantage of trading using opposite VanEck Africa and EGPT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Africa position performs unexpectedly, EGPT 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 EGPT will offset losses from the drop in EGPT's long position.| VanEck Africa vs. iShares MSCI South | VanEck Africa vs. VanEck Indonesia Index | VanEck Africa vs. iShares MSCI Thailand |
| EGPT vs. VanEck Africa Index | EGPT vs. Global X MSCI | EGPT vs. iShares MSCI Philippines | EGPT vs. iShares MSCI Peru |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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