Correlation Between VanEck Natural and IQ Hedge
Can any of the company-specific risk be diversified away by investing in both VanEck Natural and IQ Hedge 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 Natural and IQ Hedge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Natural Resources and IQ Hedge Multi Strategy, you can compare the effects of market volatilities on VanEck Natural and IQ Hedge 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 Natural with a short position of IQ Hedge. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Natural and IQ Hedge.
Diversification Opportunities for VanEck Natural and IQ Hedge
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between VanEck and QAI is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Natural Resources and IQ Hedge Multi Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ Hedge Multi and VanEck Natural 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 Natural Resources are associated (or correlated) with IQ Hedge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ Hedge Multi has no effect on the direction of VanEck Natural i.e., VanEck Natural and IQ Hedge go up and down completely randomly.
Pair Corralation between VanEck Natural and IQ Hedge
Considering the 90-day investment horizon VanEck Natural is expected to generate 1.94 times less return on investment than IQ Hedge. In addition to that, VanEck Natural is 2.85 times more volatile than IQ Hedge Multi Strategy. It trades about 0.02 of its total potential returns per unit of risk. IQ Hedge Multi Strategy is currently generating about 0.1 per unit of volatility. If you would invest 2,760 in IQ Hedge Multi Strategy on September 1, 2024 and sell it today you would earn a total of 497.00 from holding IQ Hedge Multi Strategy or generate 18.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
VanEck Natural Resources vs. IQ Hedge Multi Strategy
Performance |
| Timeline |
| VanEck Natural Resources |
| IQ Hedge Multi |
VanEck Natural and IQ Hedge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Natural and IQ Hedge
The main advantage of trading using opposite VanEck Natural and IQ Hedge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Natural position performs unexpectedly, IQ Hedge 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 IQ Hedge will offset losses from the drop in IQ Hedge's long position.| VanEck Natural vs. Invesco MSCI Global | VanEck Natural vs. WisdomTree Continuous Commodity | VanEck Natural vs. VanEck UraniumNuclear Energy | VanEck Natural vs. SPDR SP Global |
| IQ Hedge vs. Eaton Vance Enhanced | IQ Hedge vs. Grayscale Ethereum Mini | IQ Hedge vs. Intel | IQ Hedge vs. The Travelers Companies |
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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