Correlation Between Nasdaq and VanEck Global
Can any of the company-specific risk be diversified away by investing in both Nasdaq and VanEck Global 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 Nasdaq and VanEck Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and VanEck Global Listed, you can compare the effects of market volatilities on Nasdaq and VanEck Global 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 Nasdaq with a short position of VanEck Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and VanEck Global.
Diversification Opportunities for Nasdaq and VanEck Global
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nasdaq and VanEck is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and VanEck Global Listed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Global Listed and Nasdaq 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 Nasdaq Inc are associated (or correlated) with VanEck Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Global Listed has no effect on the direction of Nasdaq i.e., Nasdaq and VanEck Global go up and down completely randomly.
Pair Corralation between Nasdaq and VanEck Global
Given the investment horizon of 90 days Nasdaq is expected to generate 1.18 times less return on investment than VanEck Global. In addition to that, Nasdaq is 1.07 times more volatile than VanEck Global Listed. It trades about 0.26 of its total potential returns per unit of risk. VanEck Global Listed is currently generating about 0.33 per unit of volatility. If you would invest 2,284 in VanEck Global Listed on September 13, 2024 and sell it today you would earn a total of 329.00 from holding VanEck Global Listed or generate 14.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 97.73% |
| Values | Daily Returns |
Nasdaq Inc vs. VanEck Global Listed
Performance |
| Timeline |
| Nasdaq Inc |
| VanEck Global Listed |
Nasdaq and VanEck Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and VanEck Global
The main advantage of trading using opposite Nasdaq and VanEck Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, VanEck Global 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 Global will offset losses from the drop in VanEck Global's long position.The idea behind Nasdaq Inc and VanEck Global Listed pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| VanEck Global vs. VanEck Vectors Australian | VanEck Global vs. VanEck FTSE China | VanEck Global vs. VanEck MSCI International | VanEck Global vs. VanEck Global Clean |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |