Correlation Between VanEck ChiNext and Freedom Day
Can any of the company-specific risk be diversified away by investing in both VanEck ChiNext and Freedom Day 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 ChiNext and Freedom Day into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck ChiNext ETF and Freedom Day Dividend, you can compare the effects of market volatilities on VanEck ChiNext and Freedom Day 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 ChiNext with a short position of Freedom Day. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck ChiNext and Freedom Day.
Diversification Opportunities for VanEck ChiNext and Freedom Day
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between VanEck and Freedom is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding VanEck ChiNext ETF and Freedom Day Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Day Dividend and VanEck ChiNext 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 ChiNext ETF are associated (or correlated) with Freedom Day. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Day Dividend has no effect on the direction of VanEck ChiNext i.e., VanEck ChiNext and Freedom Day go up and down completely randomly.
Pair Corralation between VanEck ChiNext and Freedom Day
Given the investment horizon of 90 days VanEck ChiNext ETF is expected to under-perform the Freedom Day. In addition to that, VanEck ChiNext is 4.2 times more volatile than Freedom Day Dividend. It trades about -0.06 of its total potential returns per unit of risk. Freedom Day Dividend is currently generating about 0.28 per unit of volatility. If you would invest 3,342 in Freedom Day Dividend on August 29, 2024 and sell it today you would earn a total of 181.00 from holding Freedom Day Dividend or generate 5.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck ChiNext ETF vs. Freedom Day Dividend
Performance |
| Timeline |
| VanEck ChiNext ETF |
| Freedom Day Dividend |
VanEck ChiNext and Freedom Day Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck ChiNext and Freedom Day
The main advantage of trading using opposite VanEck ChiNext and Freedom Day positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck ChiNext position performs unexpectedly, Freedom Day 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 Freedom Day will offset losses from the drop in Freedom Day's long position.| VanEck ChiNext vs. Freedom Day Dividend | VanEck ChiNext vs. Davis Select International | VanEck ChiNext vs. iShares MSCI China | VanEck ChiNext vs. SmartETFs Dividend Builder |
| Freedom Day vs. BlackRock ETF Trust | Freedom Day vs. Rbb Fund | Freedom Day vs. Virtus ETF Trust | Freedom Day vs. Amplify CWP Enhanced |
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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