Correlation Between VanEck Intermediate and VanEck Short
Can any of the company-specific risk be diversified away by investing in both VanEck Intermediate and VanEck Short 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 Intermediate and VanEck Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Intermediate Muni and VanEck Short Muni, you can compare the effects of market volatilities on VanEck Intermediate and VanEck Short 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 Intermediate with a short position of VanEck Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Intermediate and VanEck Short.
Diversification Opportunities for VanEck Intermediate and VanEck Short
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and VanEck is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Intermediate Muni and VanEck Short Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Short Muni and VanEck Intermediate 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 Intermediate Muni are associated (or correlated) with VanEck Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Short Muni has no effect on the direction of VanEck Intermediate i.e., VanEck Intermediate and VanEck Short go up and down completely randomly.
Pair Corralation between VanEck Intermediate and VanEck Short
Considering the 90-day investment horizon VanEck Intermediate Muni is expected to generate 2.9 times more return on investment than VanEck Short. However, VanEck Intermediate is 2.9 times more volatile than VanEck Short Muni. It trades about 0.08 of its potential returns per unit of risk. VanEck Short Muni is currently generating about 0.12 per unit of risk. If you would invest 4,586 in VanEck Intermediate Muni on August 24, 2024 and sell it today you would earn a total of 29.00 from holding VanEck Intermediate Muni or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Intermediate Muni vs. VanEck Short Muni
Performance |
| Timeline |
| VanEck Intermediate Muni |
| VanEck Short Muni |
VanEck Intermediate and VanEck Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Intermediate and VanEck Short
The main advantage of trading using opposite VanEck Intermediate and VanEck Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Intermediate position performs unexpectedly, VanEck Short 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 Short will offset losses from the drop in VanEck Short's long position.| VanEck Intermediate vs. VanEck Long Muni | VanEck Intermediate vs. VanEck Short Muni | VanEck Intermediate vs. SPDR Nuveen Bloomberg | VanEck Intermediate vs. Invesco National AMT Free |
| VanEck Short vs. SSGA Active Trust | VanEck Short vs. SPDR Nuveen Municipal | VanEck Short vs. Xtrackers California Municipal | VanEck Short vs. iShares Short Maturity |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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