Correlation Between VanEck JP and IShares Trust
Can any of the company-specific risk be diversified away by investing in both VanEck JP and IShares Trust 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 JP and IShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck JP Morgan and iShares Trust , you can compare the effects of market volatilities on VanEck JP and IShares Trust 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 JP with a short position of IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck JP and IShares Trust.
Diversification Opportunities for VanEck JP and IShares Trust
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and IShares is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding VanEck JP Morgan and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust and VanEck JP 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 JP Morgan are associated (or correlated) with IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of VanEck JP i.e., VanEck JP and IShares Trust go up and down completely randomly.
Pair Corralation between VanEck JP and IShares Trust
Given the investment horizon of 90 days VanEck JP is expected to generate 1.6 times less return on investment than IShares Trust. In addition to that, VanEck JP is 1.31 times more volatile than iShares Trust . It trades about 0.04 of its total potential returns per unit of risk. iShares Trust is currently generating about 0.09 per unit of volatility. If you would invest 4,536 in iShares Trust on August 30, 2024 and sell it today you would earn a total of 761.00 from holding iShares Trust or generate 16.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 89.7% |
| Values | Daily Returns |
VanEck JP Morgan vs. iShares Trust
Performance |
| Timeline |
| VanEck JP Morgan |
| iShares Trust |
VanEck JP and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck JP and IShares Trust
The main advantage of trading using opposite VanEck JP and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck JP position performs unexpectedly, IShares Trust 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 IShares Trust will offset losses from the drop in IShares Trust's long position.| VanEck JP vs. Schwab Fundamental International | VanEck JP vs. Xtrackers International Real | VanEck JP vs. Schwab Fundamental Small | VanEck JP vs. Schwab Fundamental Emerging |
| IShares Trust vs. VanEck Emerging Markets | IShares Trust vs. iShares Intl High | IShares Trust vs. iShares International High |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |