Correlation Between VanEck Video and VR
Can any of the company-specific risk be diversified away by investing in both VanEck Video and VR 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 VR 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 VR, you can compare the effects of market volatilities on VanEck Video and VR 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 VR. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Video and VR.
Diversification Opportunities for VanEck Video and VR
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between VanEck and VR is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Video Gaming and VR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VR 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 VR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VR has no effect on the direction of VanEck Video i.e., VanEck Video and VR go up and down completely randomly.
Pair Corralation between VanEck Video and VR
Given the investment horizon of 90 days VanEck Video is expected to generate 1.48 times less return on investment than VR. But when comparing it to its historical volatility, VanEck Video Gaming is 1.07 times less risky than VR. It trades about 0.1 of its potential returns per unit of risk. VR is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,008 in VR on November 2, 2024 and sell it today you would earn a total of 462.00 from holding VR or generate 23.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 22.67% |
| Values | Daily Returns |
VanEck Video Gaming vs. VR
Performance |
| Timeline |
| VanEck Video Gaming |
| VR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
VanEck Video and VR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Video and VR
The main advantage of trading using opposite VanEck Video and VR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Video position performs unexpectedly, VR 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 VR will offset losses from the drop in VR's 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 |
| VR vs. AXIS Capital Holdings | VR vs. Renaissancere Holdings | VR vs. Aspira Womens Health | VR vs. Prenetics Global |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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