Correlation Between VanEck India and Global X
Can any of the company-specific risk be diversified away by investing in both VanEck India 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 India 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 India Growth and Global X Funds, you can compare the effects of market volatilities on VanEck India 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 India with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck India and Global X.
Diversification Opportunities for VanEck India and Global X
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VanEck and Global is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding VanEck India Growth and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds and VanEck India 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 India Growth 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 Funds has no effect on the direction of VanEck India i.e., VanEck India and Global X go up and down completely randomly.
Pair Corralation between VanEck India and Global X
Given the investment horizon of 90 days VanEck India Growth is expected to under-perform the Global X. In addition to that, VanEck India is 1.26 times more volatile than Global X Funds. It trades about -0.46 of its total potential returns per unit of risk. Global X Funds is currently generating about -0.31 per unit of volatility. If you would invest 2,922 in Global X Funds on November 3, 2024 and sell it today you would lose (172.00) from holding Global X Funds or give up 5.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck India Growth vs. Global X Funds
Performance |
| Timeline |
| VanEck India Growth |
| Global X Funds |
VanEck India and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck India and Global X
The main advantage of trading using opposite VanEck India and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck India 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 India vs. iShares MSCI India | VanEck India vs. Franklin FTSE India | VanEck India vs. Columbia India Consumer | VanEck India vs. Exchange Traded Concepts |
| Global X vs. Vanguard Minimum Volatility | Global X vs. Invesco SP Emerging | Global X vs. iShares MSCI Emerging | Global X vs. iShares MSCI Emerging |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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