Correlation Between VanEck Video and Global X
Can any of the company-specific risk be diversified away by investing in both VanEck Video and Global X 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 Video and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Video Gaming and Global X Video, you can compare the effects of market volatilities on VanEck Video and Global X 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 Video with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Video and Global X.
Diversification Opportunities for VanEck Video and Global X
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VanEck and Global is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Video Gaming and Global X Video in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Video and VanEck Video 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 Video Gaming are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Video has no effect on the direction of VanEck Video i.e., VanEck Video and Global X go up and down completely randomly.
Pair Corralation between VanEck Video and Global X
Given the investment horizon of 90 days VanEck Video Gaming is expected to generate 1.0 times more return on investment than Global X. However, VanEck Video is 1.0 times more volatile than Global X Video. It trades about 0.12 of its potential returns per unit of risk. Global X Video is currently generating about 0.07 per unit of risk. If you would invest 6,160 in VanEck Video Gaming on August 27, 2024 and sell it today you would earn a total of 2,127 from holding VanEck Video Gaming or generate 34.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Video Gaming vs. Global X Video
Performance |
| Timeline |
| VanEck Video Gaming |
| Global X Video |
VanEck Video and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Video and Global X
The main advantage of trading using opposite VanEck Video and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Video position performs unexpectedly, Global X 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 X will offset losses from the drop in Global X's long position.| VanEck Video vs. Vanguard Industrials Index | VanEck Video vs. Vanguard Materials Index | VanEck Video vs. Vanguard Consumer Discretionary | VanEck Video vs. Vanguard Consumer Staples |
| Global X vs. Vanguard Industrials Index | Global X vs. Vanguard Materials Index | Global X vs. Vanguard Consumer Discretionary | Global X vs. Vanguard Consumer Staples |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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