Correlation Between VanEck Agribusiness and IShares SP
Can any of the company-specific risk be diversified away by investing in both VanEck Agribusiness and IShares SP 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 Agribusiness and IShares SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Agribusiness ETF and iShares SP GSCI, you can compare the effects of market volatilities on VanEck Agribusiness and IShares SP 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 Agribusiness with a short position of IShares SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Agribusiness and IShares SP.
Diversification Opportunities for VanEck Agribusiness and IShares SP
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between VanEck and IShares is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Agribusiness ETF and iShares SP GSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SP GSCI and VanEck Agribusiness 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 Agribusiness ETF are associated (or correlated) with IShares SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SP GSCI has no effect on the direction of VanEck Agribusiness i.e., VanEck Agribusiness and IShares SP go up and down completely randomly.
Pair Corralation between VanEck Agribusiness and IShares SP
Considering the 90-day investment horizon VanEck Agribusiness ETF is expected to generate 0.77 times more return on investment than IShares SP. However, VanEck Agribusiness ETF is 1.31 times less risky than IShares SP. It trades about 0.56 of its potential returns per unit of risk. iShares SP GSCI is currently generating about 0.13 per unit of risk. If you would invest 6,454 in VanEck Agribusiness ETF on November 2, 2024 and sell it today you would earn a total of 559.00 from holding VanEck Agribusiness ETF or generate 8.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Agribusiness ETF vs. iShares SP GSCI
Performance |
| Timeline |
| VanEck Agribusiness ETF |
| iShares SP GSCI |
VanEck Agribusiness and IShares SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Agribusiness and IShares SP
The main advantage of trading using opposite VanEck Agribusiness and IShares SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Agribusiness position performs unexpectedly, IShares SP 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 IShares SP will offset losses from the drop in IShares SP's long position.| VanEck Agribusiness vs. Invesco DB Agriculture | VanEck Agribusiness vs. Invesco DB Commodity | VanEck Agribusiness vs. VanEck Steel ETF | VanEck Agribusiness vs. SPDR SP Metals |
| IShares SP vs. Invesco DB Commodity | IShares SP vs. iPath Bloomberg Commodity | IShares SP vs. Invesco DB Base | IShares SP vs. Invesco DB Agriculture |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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