Correlation Between IShares Trust and VanEck ETF
Can any of the company-specific risk be diversified away by investing in both IShares Trust 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 Trust 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 Trust and VanEck ETF Trust, you can compare the effects of market volatilities on IShares Trust 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 Trust with a short position of VanEck ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and VanEck ETF.
Diversification Opportunities for IShares Trust and VanEck ETF
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and VanEck is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust 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 Trust 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 Trust 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 Trust i.e., IShares Trust and VanEck ETF go up and down completely randomly.
Pair Corralation between IShares Trust and VanEck ETF
Given the investment horizon of 90 days iShares Trust is expected to generate 8.52 times more return on investment than VanEck ETF. However, IShares Trust is 8.52 times more volatile than VanEck ETF Trust. It trades about 0.09 of its potential returns per unit of risk. VanEck ETF Trust is currently generating about 0.68 per unit of risk. If you would invest 2,713 in iShares Trust on September 1, 2024 and sell it today you would earn a total of 20.00 from holding iShares Trust or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
iShares Trust vs. VanEck ETF Trust
Performance |
| Timeline |
| iShares Trust |
| VanEck ETF Trust |
IShares Trust and VanEck ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and VanEck ETF
The main advantage of trading using opposite IShares Trust and VanEck ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust 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 Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. Simplify Volatility Premium | IShares Trust vs. Tidal Trust II |
| VanEck ETF vs. iShares Interest Rate | VanEck ETF vs. iShares Interest Rate | VanEck ETF vs. iShares Edge Investment | VanEck ETF vs. iShares Inflation Hedged |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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