Correlation Between VanEck ChiNext and WisdomTree Emerging
Can any of the company-specific risk be diversified away by investing in both VanEck ChiNext and WisdomTree Emerging 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 WisdomTree Emerging 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 WisdomTree Emerging Markets, you can compare the effects of market volatilities on VanEck ChiNext and WisdomTree Emerging 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 WisdomTree Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck ChiNext and WisdomTree Emerging.
Diversification Opportunities for VanEck ChiNext and WisdomTree Emerging
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between VanEck and WisdomTree is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding VanEck ChiNext ETF and WisdomTree Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Emerging 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 WisdomTree Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Emerging has no effect on the direction of VanEck ChiNext i.e., VanEck ChiNext and WisdomTree Emerging go up and down completely randomly.
Pair Corralation between VanEck ChiNext and WisdomTree Emerging
Given the investment horizon of 90 days VanEck ChiNext ETF is expected to generate 5.08 times more return on investment than WisdomTree Emerging. However, VanEck ChiNext is 5.08 times more volatile than WisdomTree Emerging Markets. It trades about 0.04 of its potential returns per unit of risk. WisdomTree Emerging Markets is currently generating about -0.09 per unit of risk. If you would invest 2,889 in VanEck ChiNext ETF on September 1, 2024 and sell it today you would earn a total of 63.00 from holding VanEck ChiNext ETF or generate 2.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck ChiNext ETF vs. WisdomTree Emerging Markets
Performance |
| Timeline |
| VanEck ChiNext ETF |
| WisdomTree Emerging |
VanEck ChiNext and WisdomTree Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck ChiNext and WisdomTree Emerging
The main advantage of trading using opposite VanEck ChiNext and WisdomTree Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck ChiNext position performs unexpectedly, WisdomTree Emerging 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 WisdomTree Emerging will offset losses from the drop in WisdomTree Emerging's long position.| VanEck ChiNext vs. FT Vest Equity | VanEck ChiNext vs. Northern Lights | VanEck ChiNext vs. Dimensional International High | VanEck ChiNext vs. Matthews China Discovery |
| WisdomTree Emerging vs. Columbia EM Core | WisdomTree Emerging vs. WisdomTree BioRevolution | WisdomTree Emerging vs. iShares MSCI Emerging | WisdomTree Emerging vs. WisdomTree Emerging Markets |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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