Correlation Between VanEck JP and SPDR FTSE
Can any of the company-specific risk be diversified away by investing in both VanEck JP and SPDR FTSE 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 SPDR FTSE 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 SPDR FTSE International, you can compare the effects of market volatilities on VanEck JP and SPDR FTSE 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 SPDR FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck JP and SPDR FTSE.
Diversification Opportunities for VanEck JP and SPDR FTSE
Almost no diversification
The 3 months correlation between VanEck and SPDR is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding VanEck JP Morgan and SPDR FTSE International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR FTSE International 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 SPDR FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR FTSE International has no effect on the direction of VanEck JP i.e., VanEck JP and SPDR FTSE go up and down completely randomly.
Pair Corralation between VanEck JP and SPDR FTSE
Given the investment horizon of 90 days VanEck JP Morgan is expected to generate 0.77 times more return on investment than SPDR FTSE. However, VanEck JP Morgan is 1.31 times less risky than SPDR FTSE. It trades about 0.02 of its potential returns per unit of risk. SPDR FTSE International is currently generating about 0.0 per unit of risk. If you would invest 2,324 in VanEck JP Morgan on September 2, 2024 and sell it today you would earn a total of 66.00 from holding VanEck JP Morgan or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck JP Morgan vs. SPDR FTSE International
Performance |
| Timeline |
| VanEck JP Morgan |
| SPDR FTSE International |
VanEck JP and SPDR FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck JP and SPDR FTSE
The main advantage of trading using opposite VanEck JP and SPDR FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck JP position performs unexpectedly, SPDR FTSE 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 FTSE will offset losses from the drop in SPDR FTSE's long position.| VanEck JP vs. Invesco Emerging Markets | VanEck JP vs. PIMCO 15 Year | VanEck JP vs. SPDR Bloomberg Emerging | VanEck JP vs. iShares JP Morgan |
| SPDR FTSE vs. FT Vest Equity | SPDR FTSE vs. Zillow Group Class | SPDR FTSE vs. Northern Lights | SPDR FTSE vs. VanEck Vectors Moodys |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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