Correlation Between IShares UBS and VanEck Vectors
Can any of the company-specific risk be diversified away by investing in both IShares UBS and VanEck Vectors 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 UBS and VanEck Vectors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares UBS Government and VanEck Vectors Small, you can compare the effects of market volatilities on IShares UBS and VanEck Vectors 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 UBS with a short position of VanEck Vectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares UBS and VanEck Vectors.
Diversification Opportunities for IShares UBS and VanEck Vectors
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and VanEck is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding iShares UBS Government and VanEck Vectors Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Vectors Small and IShares UBS 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 UBS Government are associated (or correlated) with VanEck Vectors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Vectors Small has no effect on the direction of IShares UBS i.e., IShares UBS and VanEck Vectors go up and down completely randomly.
Pair Corralation between IShares UBS and VanEck Vectors
Assuming the 90 days trading horizon iShares UBS Government is expected to generate 0.42 times more return on investment than VanEck Vectors. However, iShares UBS Government is 2.38 times less risky than VanEck Vectors. It trades about 0.16 of its potential returns per unit of risk. VanEck Vectors Small is currently generating about -0.05 per unit of risk. If you would invest 12,382 in iShares UBS Government on September 1, 2024 and sell it today you would earn a total of 131.00 from holding iShares UBS Government or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares UBS Government vs. VanEck Vectors Small
Performance |
| Timeline |
| iShares UBS Government |
| VanEck Vectors Small |
IShares UBS and VanEck Vectors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares UBS and VanEck Vectors
The main advantage of trading using opposite IShares UBS and VanEck Vectors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares UBS position performs unexpectedly, VanEck Vectors 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 Vectors will offset losses from the drop in VanEck Vectors' long position.| IShares UBS vs. iShares MSCI Emerging | IShares UBS vs. iShares Global Aggregate | IShares UBS vs. iShares CoreSP MidCap | IShares UBS vs. iShares SP 500 |
| VanEck Vectors vs. Betashares Asia Technology | VanEck Vectors vs. CD Private Equity | VanEck Vectors vs. BetaShares Australia 200 | VanEck Vectors vs. Australian High Interest |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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