Correlation Between Global X and VanEck Ethereum
Can any of the company-specific risk be diversified away by investing in both Global X and VanEck Ethereum 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 Ethereum 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 Ethereum ETF, you can compare the effects of market volatilities on Global X and VanEck Ethereum 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 Ethereum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and VanEck Ethereum.
Diversification Opportunities for Global X and VanEck Ethereum
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and VanEck is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Global X Blockchain and VanEck Ethereum ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Ethereum ETF 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 Ethereum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Ethereum ETF has no effect on the direction of Global X i.e., Global X and VanEck Ethereum go up and down completely randomly.
Pair Corralation between Global X and VanEck Ethereum
Given the investment horizon of 90 days Global X Blockchain is expected to generate 1.06 times more return on investment than VanEck Ethereum. However, Global X is 1.06 times more volatile than VanEck Ethereum ETF. It trades about 0.09 of its potential returns per unit of risk. VanEck Ethereum ETF is currently generating about 0.01 per unit of risk. If you would invest 1,483 in Global X Blockchain on August 27, 2024 and sell it today you would earn a total of 5,431 from holding Global X Blockchain or generate 366.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 17.94% |
| Values | Daily Returns |
Global X Blockchain vs. VanEck Ethereum ETF
Performance |
| Timeline |
| Global X Blockchain |
| VanEck Ethereum ETF |
Global X and VanEck Ethereum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and VanEck Ethereum
The main advantage of trading using opposite Global X and VanEck Ethereum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, VanEck Ethereum 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 Ethereum will offset losses from the drop in VanEck Ethereum's long position.| Global X vs. UBS AG London | Global X vs. UBS AG London | Global X vs. ETRACS Quarterly Pay | Global X vs. ETRACS 2xMonthly Pay |
| VanEck Ethereum vs. Grayscale Bitcoin Trust | VanEck Ethereum vs. Siren Nasdaq NexGen | VanEck Ethereum vs. Grayscale Bitcoin Mini | VanEck Ethereum 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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