Correlation Between VanEck Vectors and VanEck FTSE
Can any of the company-specific risk be diversified away by investing in both VanEck Vectors and VanEck FTSE 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 Vectors and VanEck FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Vectors Australian and VanEck FTSE China, you can compare the effects of market volatilities on VanEck Vectors and VanEck FTSE 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 Vectors with a short position of VanEck FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Vectors and VanEck FTSE.
Diversification Opportunities for VanEck Vectors and VanEck FTSE
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VanEck and VanEck is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vectors Australian and VanEck FTSE China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck FTSE China and VanEck Vectors 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 Vectors Australian are associated (or correlated) with VanEck FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck FTSE China has no effect on the direction of VanEck Vectors i.e., VanEck Vectors and VanEck FTSE go up and down completely randomly.
Pair Corralation between VanEck Vectors and VanEck FTSE
Assuming the 90 days trading horizon VanEck Vectors is expected to generate 3.48 times less return on investment than VanEck FTSE. But when comparing it to its historical volatility, VanEck Vectors Australian is 1.37 times less risky than VanEck FTSE. It trades about 0.03 of its potential returns per unit of risk. VanEck FTSE China is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,450 in VanEck FTSE China on October 26, 2024 and sell it today you would earn a total of 199.00 from holding VanEck FTSE China or generate 3.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Vectors Australian vs. VanEck FTSE China
Performance |
| Timeline |
| VanEck Vectors Australian |
| VanEck FTSE China |
VanEck Vectors and VanEck FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Vectors and VanEck FTSE
The main advantage of trading using opposite VanEck Vectors and VanEck FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Vectors position performs unexpectedly, VanEck FTSE 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 FTSE will offset losses from the drop in VanEck FTSE's long position.| VanEck Vectors vs. VanEck FTSE China | VanEck Vectors vs. VanEck MSCI International | VanEck Vectors vs. VanEck Global Clean | VanEck Vectors vs. VanEck MSCI Australian |
| VanEck FTSE vs. VanEck Vectors Australian | VanEck FTSE vs. VanEck MSCI International | VanEck FTSE vs. VanEck Global Clean | VanEck FTSE vs. VanEck MSCI Australian |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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