Correlation Between IShares AEX and VanEck AMX
Can any of the company-specific risk be diversified away by investing in both IShares AEX and VanEck AMX 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 IShares AEX and VanEck AMX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares AEX UCITS and VanEck AMX UCITS, you can compare the effects of market volatilities on IShares AEX and VanEck AMX 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 IShares AEX with a short position of VanEck AMX. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares AEX and VanEck AMX.
Diversification Opportunities for IShares AEX and VanEck AMX
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and VanEck is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding iShares AEX UCITS and VanEck AMX UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck AMX UCITS and IShares AEX 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 iShares AEX UCITS are associated (or correlated) with VanEck AMX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck AMX UCITS has no effect on the direction of IShares AEX i.e., IShares AEX and VanEck AMX go up and down completely randomly.
Pair Corralation between IShares AEX and VanEck AMX
Assuming the 90 days trading horizon iShares AEX UCITS is expected to generate 0.86 times more return on investment than VanEck AMX. However, iShares AEX UCITS is 1.16 times less risky than VanEck AMX. It trades about 0.07 of its potential returns per unit of risk. VanEck AMX UCITS is currently generating about -0.01 per unit of risk. If you would invest 7,507 in iShares AEX UCITS on September 12, 2024 and sell it today you would earn a total of 1,430 from holding iShares AEX UCITS or generate 19.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
iShares AEX UCITS vs. VanEck AMX UCITS
Performance |
| Timeline |
| iShares AEX UCITS |
| VanEck AMX UCITS |
IShares AEX and VanEck AMX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares AEX and VanEck AMX
The main advantage of trading using opposite IShares AEX and VanEck AMX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares AEX position performs unexpectedly, VanEck AMX 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 AMX will offset losses from the drop in VanEck AMX's long position.| IShares AEX vs. Vanguard SP 500 | IShares AEX vs. iShares II Public | IShares AEX vs. Vanguard FTSE All World | IShares AEX vs. iShares SP 500 |
| VanEck AMX vs. SPDR Dow Jones | VanEck AMX vs. iShares Core MSCI | VanEck AMX vs. iShares SP 500 | VanEck AMX vs. Vanguard FTSE All World |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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