Correlation Between IShares Global and VanEck Video
Can any of the company-specific risk be diversified away by investing in both IShares Global and VanEck Video 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 Video into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Global Comm and VanEck Video Gaming, you can compare the effects of market volatilities on IShares Global and VanEck Video 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 Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and VanEck Video.
Diversification Opportunities for IShares Global and VanEck Video
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and VanEck is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Comm and VanEck Video Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Video Gaming 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 Comm are associated (or correlated) with VanEck Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Video Gaming has no effect on the direction of IShares Global i.e., IShares Global and VanEck Video go up and down completely randomly.
Pair Corralation between IShares Global and VanEck Video
Considering the 90-day investment horizon IShares Global is expected to generate 1.43 times less return on investment than VanEck Video. But when comparing it to its historical volatility, iShares Global Comm is 1.99 times less risky than VanEck Video. It trades about 0.69 of its potential returns per unit of risk. VanEck Video Gaming is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest 8,395 in VanEck Video Gaming on November 18, 2024 and sell it today you would earn a total of 1,129 from holding VanEck Video Gaming or generate 13.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global Comm vs. VanEck Video Gaming
Performance |
| Timeline |
| iShares Global Comm |
| VanEck Video Gaming |
IShares Global and VanEck Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and VanEck Video
The main advantage of trading using opposite IShares Global and VanEck Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, VanEck Video 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 Video will offset losses from the drop in VanEck Video's long position.| IShares Global vs. iShares Global Financials | IShares Global vs. iShares Global Tech | IShares Global vs. iShares Global Healthcare | IShares Global vs. iShares Telecommunications ETF |
| VanEck Video vs. Roundhill Video Games | VanEck Video vs. Global X Video | VanEck Video vs. Amplify ETF Trust | VanEck Video vs. Global X Cloud |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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