Correlation Between VanEck Robotics and SPDR SP
Can any of the company-specific risk be diversified away by investing in both VanEck Robotics and SPDR SP 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 Robotics and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Robotics ETF and SPDR SP Health, you can compare the effects of market volatilities on VanEck Robotics and SPDR SP 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 Robotics with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Robotics and SPDR SP.
Diversification Opportunities for VanEck Robotics and SPDR SP
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between VanEck and SPDR is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Robotics ETF and SPDR SP Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Health and VanEck Robotics 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 Robotics ETF are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP Health has no effect on the direction of VanEck Robotics i.e., VanEck Robotics and SPDR SP go up and down completely randomly.
Pair Corralation between VanEck Robotics and SPDR SP
Given the investment horizon of 90 days VanEck Robotics is expected to generate 5.22 times less return on investment than SPDR SP. But when comparing it to its historical volatility, VanEck Robotics ETF is 1.06 times less risky than SPDR SP. It trades about 0.04 of its potential returns per unit of risk. SPDR SP Health is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 8,679 in SPDR SP Health on August 24, 2024 and sell it today you would earn a total of 399.00 from holding SPDR SP Health or generate 4.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Robotics ETF vs. SPDR SP Health
Performance |
| Timeline |
| VanEck Robotics ETF |
| SPDR SP Health |
VanEck Robotics and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Robotics and SPDR SP
The main advantage of trading using opposite VanEck Robotics and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Robotics position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP's long position.| VanEck Robotics vs. SPDR SP Health | VanEck Robotics vs. SPDR SP Health | VanEck Robotics vs. Aquagold International | VanEck Robotics vs. Morningstar Unconstrained Allocation |
| SPDR SP vs. SPDR SP Health | SPDR SP vs. SPDR SP Software | SPDR SP vs. Invesco SP SmallCap | SPDR SP vs. SPDR SP Pharmaceuticals |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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