Correlation Between IShares Utilities and VanEck Junior
Can any of the company-specific risk be diversified away by investing in both IShares Utilities and VanEck Junior 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 Utilities and VanEck Junior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Utilities ETF and VanEck Junior Gold, you can compare the effects of market volatilities on IShares Utilities and VanEck Junior 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 Utilities with a short position of VanEck Junior. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Utilities and VanEck Junior.
Diversification Opportunities for IShares Utilities and VanEck Junior
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and VanEck is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding iShares Utilities ETF and VanEck Junior Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Junior Gold and IShares Utilities 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 Utilities ETF are associated (or correlated) with VanEck Junior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Junior Gold has no effect on the direction of IShares Utilities i.e., IShares Utilities and VanEck Junior go up and down completely randomly.
Pair Corralation between IShares Utilities and VanEck Junior
Considering the 90-day investment horizon iShares Utilities ETF is expected to generate 0.45 times more return on investment than VanEck Junior. However, iShares Utilities ETF is 2.24 times less risky than VanEck Junior. It trades about 0.08 of its potential returns per unit of risk. VanEck Junior Gold is currently generating about -0.23 per unit of risk. If you would invest 10,225 in iShares Utilities ETF on August 28, 2024 and sell it today you would earn a total of 176.00 from holding iShares Utilities ETF or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Utilities ETF vs. VanEck Junior Gold
Performance |
| Timeline |
| iShares Utilities ETF |
| VanEck Junior Gold |
IShares Utilities and VanEck Junior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Utilities and VanEck Junior
The main advantage of trading using opposite IShares Utilities and VanEck Junior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Utilities position performs unexpectedly, VanEck Junior 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 Junior will offset losses from the drop in VanEck Junior's long position.| IShares Utilities vs. iShares Industrials ETF | IShares Utilities vs. iShares Consumer Discretionary | IShares Utilities vs. iShares Consumer Staples | IShares Utilities vs. iShares Telecommunications ETF |
| VanEck Junior vs. VanEck Gold Miners | VanEck Junior vs. Global X Silver | VanEck Junior vs. Amplify ETF Trust | VanEck Junior vs. Pan American Silver |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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