Correlation Between IShares SP and VanEck Multi
Can any of the company-specific risk be diversified away by investing in both IShares SP and VanEck Multi 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 SP and VanEck Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SP 500 and VanEck Multi Asset Balanced, you can compare the effects of market volatilities on IShares SP and VanEck Multi 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 SP with a short position of VanEck Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and VanEck Multi.
Diversification Opportunities for IShares SP and VanEck Multi
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and VanEck is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP 500 and VanEck Multi Asset Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Multi Asset and IShares SP 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 SP 500 are associated (or correlated) with VanEck Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Multi Asset has no effect on the direction of IShares SP i.e., IShares SP and VanEck Multi go up and down completely randomly.
Pair Corralation between IShares SP and VanEck Multi
Assuming the 90 days trading horizon iShares SP 500 is expected to generate 2.19 times more return on investment than VanEck Multi. However, IShares SP is 2.19 times more volatile than VanEck Multi Asset Balanced. It trades about 0.15 of its potential returns per unit of risk. VanEck Multi Asset Balanced is currently generating about 0.15 per unit of risk. If you would invest 4,860 in iShares SP 500 on September 3, 2024 and sell it today you would earn a total of 842.00 from holding iShares SP 500 or generate 17.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SP 500 vs. VanEck Multi Asset Balanced
Performance |
| Timeline |
| iShares SP 500 |
| VanEck Multi Asset |
IShares SP and VanEck Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SP and VanEck Multi
The main advantage of trading using opposite IShares SP and VanEck Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SP position performs unexpectedly, VanEck Multi 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 Multi will offset losses from the drop in VanEck Multi's long position.| IShares SP vs. iShares III Public | IShares SP vs. iShares Core MSCI | IShares SP vs. iShares France Govt | IShares SP vs. iShares Edge MSCI |
| VanEck Multi vs. Vanguard FTSE Developed | VanEck Multi vs. HSBC MSCI Japan | VanEck Multi vs. iShares II Public | VanEck Multi vs. Hydratec Industries NV |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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