Correlation Between VanEck Digital and Capital Group
Can any of the company-specific risk be diversified away by investing in both VanEck Digital and Capital Group 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 Capital Group 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 Capital Group Core, you can compare the effects of market volatilities on VanEck Digital and Capital Group 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 Capital Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Digital and Capital Group.
Diversification Opportunities for VanEck Digital and Capital Group
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between VanEck and Capital is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Digital Transformation and Capital Group Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Group Core 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 Capital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Group Core has no effect on the direction of VanEck Digital i.e., VanEck Digital and Capital Group go up and down completely randomly.
Pair Corralation between VanEck Digital and Capital Group
Given the investment horizon of 90 days VanEck Digital Transformation is expected to generate 20.65 times more return on investment than Capital Group. However, VanEck Digital is 20.65 times more volatile than Capital Group Core. It trades about 0.19 of its potential returns per unit of risk. Capital Group Core is currently generating about 0.11 per unit of risk. If you would invest 1,445 in VanEck Digital Transformation on August 31, 2024 and sell it today you would earn a total of 389.00 from holding VanEck Digital Transformation or generate 26.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Digital Transformation vs. Capital Group Core
Performance |
| Timeline |
| VanEck Digital Trans |
| Capital Group Core |
VanEck Digital and Capital Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Digital and Capital Group
The main advantage of trading using opposite VanEck Digital and Capital Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Digital position performs unexpectedly, Capital Group 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 Capital Group will offset losses from the drop in Capital Group'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 |
| Capital Group vs. SSGA Active Trust | Capital Group vs. BlackRock Intermediate Muni | Capital Group vs. iShares BBB Rated | Capital Group vs. Xtrackers Short Duration |
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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