Correlation Between VanEck China and SPDR Bloomberg
Can any of the company-specific risk be diversified away by investing in both VanEck China and SPDR Bloomberg 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 China and SPDR Bloomberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck China Bond and SPDR Bloomberg Emerging, you can compare the effects of market volatilities on VanEck China and SPDR Bloomberg 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 China with a short position of SPDR Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck China and SPDR Bloomberg.
Diversification Opportunities for VanEck China and SPDR Bloomberg
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and SPDR is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding VanEck China Bond and SPDR Bloomberg Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Bloomberg Emerging and VanEck China 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 China Bond are associated (or correlated) with SPDR Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Bloomberg Emerging has no effect on the direction of VanEck China i.e., VanEck China and SPDR Bloomberg go up and down completely randomly.
Pair Corralation between VanEck China and SPDR Bloomberg
Given the investment horizon of 90 days VanEck China Bond is expected to generate 0.63 times more return on investment than SPDR Bloomberg. However, VanEck China Bond is 1.59 times less risky than SPDR Bloomberg. It trades about -0.15 of its potential returns per unit of risk. SPDR Bloomberg Emerging is currently generating about -0.1 per unit of risk. If you would invest 2,235 in VanEck China Bond on August 27, 2024 and sell it today you would lose (28.00) from holding VanEck China Bond or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck China Bond vs. SPDR Bloomberg Emerging
Performance |
| Timeline |
| VanEck China Bond |
| SPDR Bloomberg Emerging |
VanEck China and SPDR Bloomberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck China and SPDR Bloomberg
The main advantage of trading using opposite VanEck China and SPDR Bloomberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck China position performs unexpectedly, SPDR Bloomberg 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 SPDR Bloomberg will offset losses from the drop in SPDR Bloomberg's long position.| VanEck China vs. Vanguard Emerging Markets | VanEck China vs. SPDR FTSE International | VanEck China vs. FT Vest Equity | VanEck China vs. Zillow Group Class |
| SPDR Bloomberg vs. Schwab Fundamental International | SPDR Bloomberg vs. Xtrackers International Real | SPDR Bloomberg vs. Schwab Fundamental Small | SPDR Bloomberg vs. Schwab Fundamental Emerging |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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