Correlation Between Global X and VanEck Digital
Can any of the company-specific risk be diversified away by investing in both Global X and VanEck Digital 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 Global X and VanEck Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Blockchain and VanEck Digital Transformation, you can compare the effects of market volatilities on Global X and VanEck Digital 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 Global X with a short position of VanEck Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and VanEck Digital.
Diversification Opportunities for Global X and VanEck Digital
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Global and VanEck is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Global X Blockchain and VanEck Digital Transformation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Digital Trans and Global X 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 Global X Blockchain are associated (or correlated) with VanEck Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Digital Trans has no effect on the direction of Global X i.e., Global X and VanEck Digital go up and down completely randomly.
Pair Corralation between Global X and VanEck Digital
Given the investment horizon of 90 days Global X is expected to generate 1.14 times less return on investment than VanEck Digital. In addition to that, Global X is 1.06 times more volatile than VanEck Digital Transformation. It trades about 0.08 of its total potential returns per unit of risk. VanEck Digital Transformation is currently generating about 0.1 per unit of volatility. If you would invest 751.00 in VanEck Digital Transformation on August 27, 2024 and sell it today you would earn a total of 1,096 from holding VanEck Digital Transformation or generate 145.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Blockchain vs. VanEck Digital Transformation
Performance |
| Timeline |
| Global X Blockchain |
| VanEck Digital Trans |
Global X and VanEck Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and VanEck Digital
The main advantage of trading using opposite Global X and VanEck Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, VanEck Digital 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 Digital will offset losses from the drop in VanEck Digital's long position.| Global X vs. VanEck Digital Transformation | Global X vs. Bitwise Crypto Industry | Global X vs. First Trust Indxx | Global X vs. First Trust SkyBridge |
| VanEck Digital vs. Grayscale Bitcoin Trust | VanEck Digital vs. Siren Nasdaq NexGen | VanEck Digital vs. Grayscale Bitcoin Mini | VanEck Digital vs. First Trust SkyBridge |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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