Correlation Between IShares Global and VanEck Vectors
Can any of the company-specific risk be diversified away by investing in both IShares Global 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 Global 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 Global 100 and VanEck Vectors ETF, you can compare the effects of market volatilities on IShares Global 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 Global with a short position of VanEck Vectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and VanEck Vectors.
Diversification Opportunities for IShares Global and VanEck Vectors
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IShares and VanEck is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global 100 and VanEck Vectors ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Vectors ETF and IShares Global 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 Global 100 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 ETF has no effect on the direction of IShares Global i.e., IShares Global and VanEck Vectors go up and down completely randomly.
Pair Corralation between IShares Global and VanEck Vectors
Considering the 90-day investment horizon iShares Global 100 is expected to generate 1.17 times more return on investment than VanEck Vectors. However, IShares Global is 1.17 times more volatile than VanEck Vectors ETF. It trades about 0.13 of its potential returns per unit of risk. VanEck Vectors ETF is currently generating about 0.11 per unit of risk. If you would invest 7,761 in iShares Global 100 on September 14, 2024 and sell it today you would earn a total of 2,524 from holding iShares Global 100 or generate 32.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global 100 vs. VanEck Vectors ETF
Performance |
| Timeline |
| iShares Global 100 |
| VanEck Vectors ETF |
IShares Global and VanEck Vectors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and VanEck Vectors
The main advantage of trading using opposite IShares Global and VanEck Vectors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global 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 Global vs. iShares Europe ETF | IShares Global vs. iShares Global Financials | IShares Global vs. iShares Global Healthcare | IShares Global vs. iShares Global Comm |
| VanEck Vectors vs. Vanguard Total World | VanEck Vectors vs. iShares MSCI ACWI | VanEck Vectors vs. iShares Global 100 | VanEck Vectors vs. iShares MSCI 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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