Correlation Between VanEck Vectors and Betashares Asia
Can any of the company-specific risk be diversified away by investing in both VanEck Vectors and Betashares Asia 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 Betashares Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Vectors Small and Betashares Asia Technology, you can compare the effects of market volatilities on VanEck Vectors and Betashares Asia 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 Betashares Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Vectors and Betashares Asia.
Diversification Opportunities for VanEck Vectors and Betashares Asia
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and Betashares is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vectors Small and Betashares Asia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Betashares Asia Tech 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 Small are associated (or correlated) with Betashares Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Betashares Asia Tech has no effect on the direction of VanEck Vectors i.e., VanEck Vectors and Betashares Asia go up and down completely randomly.
Pair Corralation between VanEck Vectors and Betashares Asia
Assuming the 90 days trading horizon VanEck Vectors Small is expected to generate 1.43 times more return on investment than Betashares Asia. However, VanEck Vectors is 1.43 times more volatile than Betashares Asia Technology. It trades about -0.05 of its potential returns per unit of risk. Betashares Asia Technology is currently generating about -0.28 per unit of risk. If you would invest 2,022 in VanEck Vectors Small on September 1, 2024 and sell it today you would lose (17.00) from holding VanEck Vectors Small or give up 0.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
VanEck Vectors Small vs. Betashares Asia Technology
Performance |
| Timeline |
| VanEck Vectors Small |
| Betashares Asia Tech |
VanEck Vectors and Betashares Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Vectors and Betashares Asia
The main advantage of trading using opposite VanEck Vectors and Betashares Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Vectors position performs unexpectedly, Betashares Asia 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 Betashares Asia will offset losses from the drop in Betashares Asia's long position.| VanEck Vectors vs. Betashares Asia Technology | VanEck Vectors vs. CD Private Equity | VanEck Vectors vs. BetaShares Australia 200 | VanEck Vectors vs. Australian High Interest |
| Betashares Asia vs. Betashares Australian Major | Betashares Asia vs. Betashares Wealth Builder | Betashares Asia vs. Betashares Australian Cash | Betashares Asia vs. Betashares Australian Bank |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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