Correlation Between VanEck Video and Vanguard Industrials
Can any of the company-specific risk be diversified away by investing in both VanEck Video and Vanguard Industrials 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 Vanguard Industrials 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 Vanguard Industrials Index, you can compare the effects of market volatilities on VanEck Video and Vanguard Industrials 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 Vanguard Industrials. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Video and Vanguard Industrials.
Diversification Opportunities for VanEck Video and Vanguard Industrials
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and Vanguard is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Video Gaming and Vanguard Industrials Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Industrials 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 Vanguard Industrials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Industrials has no effect on the direction of VanEck Video i.e., VanEck Video and Vanguard Industrials go up and down completely randomly.
Pair Corralation between VanEck Video and Vanguard Industrials
Given the investment horizon of 90 days VanEck Video Gaming is expected to generate 1.31 times more return on investment than Vanguard Industrials. However, VanEck Video is 1.31 times more volatile than Vanguard Industrials Index. It trades about 0.28 of its potential returns per unit of risk. Vanguard Industrials Index is currently generating about 0.24 per unit of risk. If you would invest 7,573 in VanEck Video Gaming on August 30, 2024 and sell it today you would earn a total of 772.00 from holding VanEck Video Gaming or generate 10.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Video Gaming vs. Vanguard Industrials Index
Performance |
| Timeline |
| VanEck Video Gaming |
| Vanguard Industrials |
VanEck Video and Vanguard Industrials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Video and Vanguard Industrials
The main advantage of trading using opposite VanEck Video and Vanguard Industrials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Video position performs unexpectedly, Vanguard Industrials 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 Vanguard Industrials will offset losses from the drop in Vanguard Industrials' long position.| VanEck Video vs. Roundhill Video Games | VanEck Video vs. Global X Video | VanEck Video vs. Amplify ETF Trust | VanEck Video vs. Global X Cloud |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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