Correlation Between VanEck Agribusiness and Global X
Can any of the company-specific risk be diversified away by investing in both VanEck Agribusiness and Global X 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 Global X 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 Global X Uranium, you can compare the effects of market volatilities on VanEck Agribusiness and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Agribusiness and Global X.
Diversification Opportunities for VanEck Agribusiness and Global X
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between VanEck and Global is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Agribusiness ETF and Global X Uranium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Uranium 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Uranium has no effect on the direction of VanEck Agribusiness i.e., VanEck Agribusiness and Global X go up and down completely randomly.
Pair Corralation between VanEck Agribusiness and Global X
Considering the 90-day investment horizon VanEck Agribusiness ETF is expected to under-perform the Global X. But the etf apears to be less risky and, when comparing its historical volatility, VanEck Agribusiness ETF is 2.49 times less risky than Global X. The etf trades about -0.04 of its potential returns per unit of risk. The Global X Uranium is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,156 in Global X Uranium on August 26, 2024 and sell it today you would earn a total of 156.00 from holding Global X Uranium or generate 4.94% 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. Global X Uranium
Performance |
| Timeline |
| VanEck Agribusiness ETF |
| Global X Uranium |
VanEck Agribusiness and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Agribusiness and Global X
The main advantage of trading using opposite VanEck Agribusiness and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Agribusiness position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X'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 |
| Global X vs. Sprott Uranium Miners | Global X vs. Uranium Energy Corp | Global X vs. Cameco Corp | Global X vs. Energy Fuels |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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