Correlation Between 3M and VanEck India
Can any of the company-specific risk be diversified away by investing in both 3M and VanEck India 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 3M and VanEck India into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3M Company and VanEck India Growth, you can compare the effects of market volatilities on 3M and VanEck India 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 3M with a short position of VanEck India. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M and VanEck India.
Diversification Opportunities for 3M and VanEck India
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 3M and VanEck is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding 3M Company and VanEck India Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck India Growth and 3M 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 3M Company are associated (or correlated) with VanEck India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck India Growth has no effect on the direction of 3M i.e., 3M and VanEck India go up and down completely randomly.
Pair Corralation between 3M and VanEck India
Considering the 90-day investment horizon 3M Company is expected to generate 1.95 times more return on investment than VanEck India. However, 3M is 1.95 times more volatile than VanEck India Growth. It trades about 0.1 of its potential returns per unit of risk. VanEck India Growth is currently generating about 0.08 per unit of risk. If you would invest 8,069 in 3M Company on August 27, 2024 and sell it today you would earn a total of 4,773 from holding 3M Company or generate 59.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
3M Company vs. VanEck India Growth
Performance |
| Timeline |
| 3M Company |
| VanEck India Growth |
3M and VanEck India Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3M and VanEck India
The main advantage of trading using opposite 3M and VanEck India positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M position performs unexpectedly, VanEck India 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 India will offset losses from the drop in VanEck India's long position.| 3M vs. Vast Renewables Limited | 3M vs. 1847 Holdings LLC | 3M vs. Westport Fuel Systems | 3M vs. Brookfield Business Partners |
| VanEck India vs. iShares MSCI India | VanEck India vs. Franklin FTSE India | VanEck India vs. Columbia India Consumer | VanEck India vs. Exchange Traded Concepts |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |