Correlation Between Global X and VanEck Vectors
Can any of the company-specific risk be diversified away by investing in both Global X 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 Global X and VanEck Vectors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X AgTech and VanEck Vectors ETF, you can compare the effects of market volatilities on Global X 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 Global X with a short position of VanEck Vectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and VanEck Vectors.
Diversification Opportunities for Global X and VanEck Vectors
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and VanEck is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Global X AgTech 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 Global X 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 Global X AgTech 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 Global X i.e., Global X and VanEck Vectors go up and down completely randomly.
Pair Corralation between Global X and VanEck Vectors
Given the investment horizon of 90 days Global X AgTech is expected to generate 0.56 times more return on investment than VanEck Vectors. However, Global X AgTech is 1.8 times less risky than VanEck Vectors. It trades about 0.01 of its potential returns per unit of risk. VanEck Vectors ETF is currently generating about -0.16 per unit of risk. If you would invest 1,040 in Global X AgTech on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Global X AgTech or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X AgTech vs. VanEck Vectors ETF
Performance |
| Timeline |
| Global X AgTech |
| VanEck Vectors ETF |
Global X and VanEck Vectors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and VanEck Vectors
The main advantage of trading using opposite Global X and VanEck Vectors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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.| Global X vs. Main Sector Rotation | Global X vs. Franklin Exponential Data | Global X vs. Goldman Sachs Innovate |
| VanEck Vectors vs. Gogoro Inc | VanEck Vectors vs. Global X Disruptive | VanEck Vectors vs. Gulf Island Fabrication | VanEck Vectors vs. VanEck Green Bond |
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.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |