Correlation Between VanEck Digital and SPDR Galaxy
Can any of the company-specific risk be diversified away by investing in both VanEck Digital and SPDR Galaxy 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 SPDR Galaxy 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 SPDR Galaxy Hedged, you can compare the effects of market volatilities on VanEck Digital and SPDR Galaxy 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 SPDR Galaxy. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Digital and SPDR Galaxy.
Diversification Opportunities for VanEck Digital and SPDR Galaxy
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VanEck and SPDR is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Digital Transformation and SPDR Galaxy Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Galaxy Hedged 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 SPDR Galaxy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Galaxy Hedged has no effect on the direction of VanEck Digital i.e., VanEck Digital and SPDR Galaxy go up and down completely randomly.
Pair Corralation between VanEck Digital and SPDR Galaxy
Given the investment horizon of 90 days VanEck Digital Transformation is expected to under-perform the SPDR Galaxy. In addition to that, VanEck Digital is 1.39 times more volatile than SPDR Galaxy Hedged. It trades about -0.33 of its total potential returns per unit of risk. SPDR Galaxy Hedged is currently generating about -0.3 per unit of volatility. If you would invest 3,521 in SPDR Galaxy Hedged on December 6, 2024 and sell it today you would lose (628.00) from holding SPDR Galaxy Hedged or give up 17.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Digital Transformation vs. SPDR Galaxy Hedged
Performance |
| Timeline |
| VanEck Digital Trans |
| SPDR Galaxy Hedged |
VanEck Digital and SPDR Galaxy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Digital and SPDR Galaxy
The main advantage of trading using opposite VanEck Digital and SPDR Galaxy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Digital position performs unexpectedly, SPDR Galaxy 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 SPDR Galaxy will offset losses from the drop in SPDR Galaxy'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 |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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