Correlation Between VanEck Investment and VanEck ETF
Can any of the company-specific risk be diversified away by investing in both VanEck Investment and VanEck ETF 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 Investment and VanEck ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Investment Grade and VanEck ETF Trust, you can compare the effects of market volatilities on VanEck Investment and VanEck ETF 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 Investment with a short position of VanEck ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Investment and VanEck ETF.
Diversification Opportunities for VanEck Investment and VanEck ETF
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between VanEck and VanEck is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Investment Grade and VanEck ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck ETF Trust and VanEck Investment 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 Investment Grade are associated (or correlated) with VanEck ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck ETF Trust has no effect on the direction of VanEck Investment i.e., VanEck Investment and VanEck ETF go up and down completely randomly.
Pair Corralation between VanEck Investment and VanEck ETF
Given the investment horizon of 90 days VanEck Investment is expected to generate 1.15 times less return on investment than VanEck ETF. In addition to that, VanEck Investment is 1.67 times more volatile than VanEck ETF Trust. It trades about 0.18 of its total potential returns per unit of risk. VanEck ETF Trust is currently generating about 0.34 per unit of volatility. If you would invest 4,562 in VanEck ETF Trust on October 25, 2024 and sell it today you would earn a total of 745.00 from holding VanEck ETF Trust or generate 16.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Investment Grade vs. VanEck ETF Trust
Performance |
| Timeline |
| VanEck Investment Grade |
| VanEck ETF Trust |
VanEck Investment and VanEck ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Investment and VanEck ETF
The main advantage of trading using opposite VanEck Investment and VanEck ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Investment position performs unexpectedly, VanEck ETF 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 VanEck ETF will offset losses from the drop in VanEck ETF's long position.| VanEck Investment vs. SPDR Bloomberg Investment | VanEck Investment vs. iShares Floating Rate | VanEck Investment vs. SPDR Barclays Long | VanEck Investment vs. Invesco Variable Rate |
| VanEck ETF vs. Janus Detroit Street | VanEck ETF vs. Janus Detroit Street | VanEck ETF vs. BlackRock AAA CLO | VanEck ETF vs. VanEck Investment Grade |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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