Correlation Between Global X and VanEck Indonesia
Can any of the company-specific risk be diversified away by investing in both Global X and VanEck Indonesia 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 Global X and VanEck Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X MSCI and VanEck Indonesia Index, you can compare the effects of market volatilities on Global X and VanEck Indonesia 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 Global X with a short position of VanEck Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and VanEck Indonesia.
Diversification Opportunities for Global X and VanEck Indonesia
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and VanEck is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Global X MSCI and VanEck Indonesia Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Indonesia Index and Global X 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 Global X MSCI are associated (or correlated) with VanEck Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Indonesia Index has no effect on the direction of Global X i.e., Global X and VanEck Indonesia go up and down completely randomly.
Pair Corralation between Global X and VanEck Indonesia
Considering the 90-day investment horizon Global X MSCI is expected to generate 1.05 times more return on investment than VanEck Indonesia. However, Global X is 1.05 times more volatile than VanEck Indonesia Index. It trades about 0.1 of its potential returns per unit of risk. VanEck Indonesia Index is currently generating about -0.36 per unit of risk. If you would invest 2,324 in Global X MSCI on August 27, 2024 and sell it today you would earn a total of 46.00 from holding Global X MSCI or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X MSCI vs. VanEck Indonesia Index
Performance |
| Timeline |
| Global X MSCI |
| VanEck Indonesia Index |
Global X and VanEck Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and VanEck Indonesia
The main advantage of trading using opposite Global X and VanEck Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, VanEck Indonesia 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 Indonesia will offset losses from the drop in VanEck Indonesia's long position.| Global X vs. iShares MSCI Hong | Global X vs. HUMANA INC | Global X vs. SCOR PK | Global X vs. Aquagold International |
| VanEck Indonesia vs. iShares MSCI Thailand | VanEck Indonesia vs. iShares MSCI Chile | VanEck Indonesia vs. iShares MSCI Turkey | VanEck Indonesia vs. Global X MSCI |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |