Correlation Between VanEck Digital and IndexIQ
Can any of the company-specific risk be diversified away by investing in both VanEck Digital and IndexIQ 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 IndexIQ 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 IndexIQ, you can compare the effects of market volatilities on VanEck Digital and IndexIQ 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 IndexIQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Digital and IndexIQ.
Diversification Opportunities for VanEck Digital and IndexIQ
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and IndexIQ is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Digital Transformation and IndexIQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ 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 IndexIQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IndexIQ has no effect on the direction of VanEck Digital i.e., VanEck Digital and IndexIQ go up and down completely randomly.
Pair Corralation between VanEck Digital and IndexIQ
If you would invest 977.00 in VanEck Digital Transformation on September 2, 2024 and sell it today you would earn a total of 903.00 from holding VanEck Digital Transformation or generate 92.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 1.56% |
| Values | Daily Returns |
VanEck Digital Transformation vs. IndexIQ
Performance |
| Timeline |
| VanEck Digital Trans |
| IndexIQ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
VanEck Digital and IndexIQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Digital and IndexIQ
The main advantage of trading using opposite VanEck Digital and IndexIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Digital position performs unexpectedly, IndexIQ 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 IndexIQ will offset losses from the drop in IndexIQ'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 |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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