Correlation Between VanEck Digital and Global X
Can any of the company-specific risk be diversified away by investing in both VanEck Digital and Global X 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 Digital and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Digital Transformation and Global X Blockchain, you can compare the effects of market volatilities on VanEck Digital and Global X 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 Digital with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Digital and Global X.
Diversification Opportunities for VanEck Digital and Global X
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between VanEck and Global is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Digital Transformation and Global X Blockchain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Blockchain and VanEck Digital 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 Digital Transformation are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Blockchain has no effect on the direction of VanEck Digital i.e., VanEck Digital and Global X go up and down completely randomly.
Pair Corralation between VanEck Digital and Global X
Given the investment horizon of 90 days VanEck Digital Transformation is expected to generate 0.95 times more return on investment than Global X. However, VanEck Digital Transformation is 1.05 times less risky than Global X. It trades about 0.18 of its potential returns per unit of risk. Global X Blockchain is currently generating about 0.16 per unit of risk. If you would invest 1,470 in VanEck Digital Transformation on August 30, 2024 and sell it today you would earn a total of 364.00 from holding VanEck Digital Transformation or generate 24.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Digital Transformation vs. Global X Blockchain
Performance |
| Timeline |
| VanEck Digital Trans |
| Global X Blockchain |
VanEck Digital and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Digital and Global X
The main advantage of trading using opposite VanEck Digital and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Digital position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| VanEck Digital vs. Bitwise Crypto Industry | VanEck Digital vs. Global X Blockchain | VanEck Digital vs. First Trust Indxx | VanEck Digital vs. First Trust SkyBridge |
| Global X vs. Vanguard Industrials Index | Global X vs. Vanguard Consumer Discretionary | Global X vs. Vanguard Materials Index | Global X vs. Vanguard Health Care |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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