Correlation Between VanEck Intermediate and VanEck Vectors
Can any of the company-specific risk be diversified away by investing in both VanEck Intermediate 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 VanEck Intermediate and VanEck Vectors 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 Vectors ETF, you can compare the effects of market volatilities on VanEck Intermediate 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 VanEck Intermediate with a short position of VanEck Vectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Intermediate and VanEck Vectors.
Diversification Opportunities for VanEck Intermediate and VanEck Vectors
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VanEck and VanEck is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Intermediate Muni 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 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 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 VanEck Intermediate i.e., VanEck Intermediate and VanEck Vectors go up and down completely randomly.
Pair Corralation between VanEck Intermediate and VanEck Vectors
Considering the 90-day investment horizon VanEck Intermediate is expected to generate 1.12 times less return on investment than VanEck Vectors. But when comparing it to its historical volatility, VanEck Intermediate Muni is 1.01 times less risky than VanEck Vectors. It trades about 0.05 of its potential returns per unit of risk. VanEck Vectors ETF is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,356 in VanEck Vectors ETF on September 3, 2024 and sell it today you would earn a total of 324.00 from holding VanEck Vectors ETF or generate 7.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Intermediate Muni vs. VanEck Vectors ETF
Performance |
| Timeline |
| VanEck Intermediate Muni |
| VanEck Vectors ETF |
VanEck Intermediate and VanEck Vectors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Intermediate and VanEck Vectors
The main advantage of trading using opposite VanEck Intermediate and VanEck Vectors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Intermediate 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.The idea behind VanEck Intermediate Muni and VanEck Vectors ETF pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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