Correlation Between Global X and VanEck Video
Can any of the company-specific risk be diversified away by investing in both Global X and VanEck Video 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 Video into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Thematic and VanEck Video Gaming, you can compare the effects of market volatilities on Global X and VanEck Video 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 Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and VanEck Video.
Diversification Opportunities for Global X and VanEck Video
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and VanEck is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Global X Thematic and VanEck Video Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Video Gaming 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 Thematic are associated (or correlated) with VanEck Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Video Gaming has no effect on the direction of Global X i.e., Global X and VanEck Video go up and down completely randomly.
Pair Corralation between Global X and VanEck Video
Given the investment horizon of 90 days Global X Thematic is expected to generate 0.9 times more return on investment than VanEck Video. However, Global X Thematic is 1.11 times less risky than VanEck Video. It trades about 0.11 of its potential returns per unit of risk. VanEck Video Gaming is currently generating about 0.04 per unit of risk. If you would invest 2,357 in Global X Thematic on October 20, 2024 and sell it today you would earn a total of 51.00 from holding Global X Thematic or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Thematic vs. VanEck Video Gaming
Performance |
| Timeline |
| Global X Thematic |
| VanEck Video Gaming |
Global X and VanEck Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and VanEck Video
The main advantage of trading using opposite Global X and VanEck Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, VanEck Video 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 Video will offset losses from the drop in VanEck Video's long position.The idea behind Global X Thematic and VanEck Video Gaming pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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