Correlation Between VanEck Long and VanEck Vectors
Can any of the company-specific risk be diversified away by investing in both VanEck Long 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 VanEck Long and VanEck Vectors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Long Muni and VanEck Vectors ETF, you can compare the effects of market volatilities on VanEck Long 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 VanEck Long with a short position of VanEck Vectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Long and VanEck Vectors.
Diversification Opportunities for VanEck Long and VanEck Vectors
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VanEck and VanEck is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Long Muni 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 VanEck Long 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 VanEck Long Muni 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 VanEck Long i.e., VanEck Long and VanEck Vectors go up and down completely randomly.
Pair Corralation between VanEck Long and VanEck Vectors
Considering the 90-day investment horizon VanEck Long Muni is expected to generate 1.52 times more return on investment than VanEck Vectors. However, VanEck Long is 1.52 times more volatile than VanEck Vectors ETF. It trades about 0.03 of its potential returns per unit of risk. VanEck Vectors ETF is currently generating about 0.05 per unit of risk. If you would invest 1,764 in VanEck Long Muni on August 27, 2024 and sell it today you would earn a total of 37.00 from holding VanEck Long Muni or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Long Muni vs. VanEck Vectors ETF
Performance |
| Timeline |
| VanEck Long Muni |
| VanEck Vectors ETF |
VanEck Long and VanEck Vectors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Long and VanEck Vectors
The main advantage of trading using opposite VanEck Long and VanEck Vectors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Long 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.| VanEck Long vs. Franklin Liberty Intermediate | VanEck Long vs. Hartford Municipal Opportunities | VanEck Long vs. IQ MacKay Municipal |
| VanEck Vectors vs. Franklin Liberty Intermediate | VanEck Vectors vs. Hartford Municipal Opportunities | VanEck Vectors vs. IQ MacKay Municipal |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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