Correlation Between DSJA and VanEck Agribusiness
Can any of the company-specific risk be diversified away by investing in both DSJA and VanEck Agribusiness 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 DSJA and VanEck Agribusiness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSJA and VanEck Agribusiness ETF, you can compare the effects of market volatilities on DSJA and VanEck Agribusiness 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 DSJA with a short position of VanEck Agribusiness. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSJA and VanEck Agribusiness.
Diversification Opportunities for DSJA and VanEck Agribusiness
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DSJA and VanEck is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding DSJA and VanEck Agribusiness ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Agribusiness ETF and DSJA 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 DSJA are associated (or correlated) with VanEck Agribusiness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Agribusiness ETF has no effect on the direction of DSJA i.e., DSJA and VanEck Agribusiness go up and down completely randomly.
Pair Corralation between DSJA and VanEck Agribusiness
Given the investment horizon of 90 days DSJA is expected to generate 0.23 times more return on investment than VanEck Agribusiness. However, DSJA is 4.3 times less risky than VanEck Agribusiness. It trades about 0.38 of its potential returns per unit of risk. VanEck Agribusiness ETF is currently generating about -0.02 per unit of risk. If you would invest 2,796 in DSJA on September 2, 2024 and sell it today you would earn a total of 69.00 from holding DSJA or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 8.06% |
| Values | Daily Returns |
DSJA vs. VanEck Agribusiness ETF
Performance |
| Timeline |
| DSJA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| VanEck Agribusiness ETF |
DSJA and VanEck Agribusiness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DSJA and VanEck Agribusiness
The main advantage of trading using opposite DSJA and VanEck Agribusiness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSJA position performs unexpectedly, VanEck Agribusiness 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 VanEck Agribusiness will offset losses from the drop in VanEck Agribusiness' long position.The idea behind DSJA and VanEck Agribusiness ETF pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| VanEck Agribusiness vs. Invesco DB Agriculture | VanEck Agribusiness vs. Invesco DB Commodity | VanEck Agribusiness vs. VanEck Steel ETF | VanEck Agribusiness vs. SPDR SP Metals |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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