Correlation Between Vaneck Emerging and Global Hard
Can any of the company-specific risk be diversified away by investing in both Vaneck Emerging and Global Hard 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 Emerging and Global Hard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vaneck Emerging Markets and Global Hard Assets, you can compare the effects of market volatilities on Vaneck Emerging and Global Hard 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 Emerging with a short position of Global Hard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vaneck Emerging and Global Hard.
Diversification Opportunities for Vaneck Emerging and Global Hard
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vaneck and Global is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Vaneck Emerging Markets and Global Hard Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Hard Assets and Vaneck Emerging 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 Emerging Markets are associated (or correlated) with Global Hard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Hard Assets has no effect on the direction of Vaneck Emerging i.e., Vaneck Emerging and Global Hard go up and down completely randomly.
Pair Corralation between Vaneck Emerging and Global Hard
Assuming the 90 days horizon Vaneck Emerging is expected to generate 1.44 times less return on investment than Global Hard. But when comparing it to its historical volatility, Vaneck Emerging Markets is 1.09 times less risky than Global Hard. It trades about 0.05 of its potential returns per unit of risk. Global Hard Assets is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,633 in Global Hard Assets on August 29, 2024 and sell it today you would earn a total of 426.00 from holding Global Hard Assets or generate 11.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vaneck Emerging Markets vs. Global Hard Assets
Performance |
| Timeline |
| Vaneck Emerging Markets |
| Global Hard Assets |
Vaneck Emerging and Global Hard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vaneck Emerging and Global Hard
The main advantage of trading using opposite Vaneck Emerging and Global Hard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vaneck Emerging position performs unexpectedly, Global Hard 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 Global Hard will offset losses from the drop in Global Hard's long position.| Vaneck Emerging vs. Nova Fund Class | Vaneck Emerging vs. Nasdaq 100 Index Fund | Vaneck Emerging vs. Jp Morgan Smartretirement | Vaneck Emerging vs. Barings Active Short |
| Global Hard vs. Bbh Intermediate Municipal | Global Hard vs. Mirova Global Green | Global Hard vs. Ambrus Core Bond | Global Hard vs. Multisector Bond Sma |
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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