Correlation Between VanEck Oil and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both VanEck Oil and IShares MSCI 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 Oil and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Oil Refiners and iShares MSCI Global, you can compare the effects of market volatilities on VanEck Oil and IShares MSCI 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 Oil with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Oil and IShares MSCI.
Diversification Opportunities for VanEck Oil and IShares MSCI
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between VanEck and IShares is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Oil Refiners and iShares MSCI Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Global and VanEck Oil 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 Oil Refiners are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI Global has no effect on the direction of VanEck Oil i.e., VanEck Oil and IShares MSCI go up and down completely randomly.
Pair Corralation between VanEck Oil and IShares MSCI
Given the investment horizon of 90 days VanEck Oil Refiners is expected to under-perform the IShares MSCI. But the etf apears to be less risky and, when comparing its historical volatility, VanEck Oil Refiners is 1.25 times less risky than IShares MSCI. The etf trades about -0.04 of its potential returns per unit of risk. The iShares MSCI Global is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,755 in iShares MSCI Global on August 28, 2024 and sell it today you would earn a total of 115.00 from holding iShares MSCI Global or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Oil Refiners vs. iShares MSCI Global
Performance |
| Timeline |
| VanEck Oil Refiners |
| iShares MSCI Global |
VanEck Oil and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Oil and IShares MSCI
The main advantage of trading using opposite VanEck Oil and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Oil position performs unexpectedly, IShares MSCI 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 IShares MSCI will offset losses from the drop in IShares MSCI's long position.| VanEck Oil vs. EA Series Trust | VanEck Oil vs. EA Series Trust | VanEck Oil vs. Rumble Inc | VanEck Oil vs. EA Series Trust |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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