Correlation Between IShares Core and VanEck ETF
Can any of the company-specific risk be diversified away by investing in both IShares Core and VanEck ETF 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 Core and VanEck ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SP and VanEck ETF Trust, you can compare the effects of market volatilities on IShares Core and VanEck ETF 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 Core with a short position of VanEck ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and VanEck ETF.
Diversification Opportunities for IShares Core and VanEck ETF
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and VanEck is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and VanEck ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck ETF Trust and IShares Core 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 Core SP are associated (or correlated) with VanEck ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck ETF Trust has no effect on the direction of IShares Core i.e., IShares Core and VanEck ETF go up and down completely randomly.
Pair Corralation between IShares Core and VanEck ETF
Considering the 90-day investment horizon iShares Core SP is expected to generate 0.67 times more return on investment than VanEck ETF. However, iShares Core SP is 1.5 times less risky than VanEck ETF. It trades about 0.35 of its potential returns per unit of risk. VanEck ETF Trust is currently generating about 0.2 per unit of risk. If you would invest 57,372 in iShares Core SP on September 2, 2024 and sell it today you would earn a total of 3,135 from holding iShares Core SP or generate 5.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core SP vs. VanEck ETF Trust
Performance |
| Timeline |
| iShares Core SP |
| VanEck ETF Trust |
IShares Core and VanEck ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and VanEck ETF
The main advantage of trading using opposite IShares Core and VanEck ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, VanEck ETF 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 ETF will offset losses from the drop in VanEck ETF's long position.| IShares Core vs. iShares Core SP | IShares Core vs. iShares Core SP | IShares Core vs. iShares SP 500 | IShares Core vs. iShares Russell 2000 |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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