Correlation Between VanEck Multi and SPDR Dow
Can any of the company-specific risk be diversified away by investing in both VanEck Multi and SPDR Dow 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 Multi and SPDR Dow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Multi Asset Balanced and SPDR Dow Jones, you can compare the effects of market volatilities on VanEck Multi and SPDR Dow 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 Multi with a short position of SPDR Dow. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Multi and SPDR Dow.
Diversification Opportunities for VanEck Multi and SPDR Dow
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and SPDR is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Multi Asset Balanced and SPDR Dow Jones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Dow Jones and VanEck Multi 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 Multi Asset Balanced are associated (or correlated) with SPDR Dow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Dow Jones has no effect on the direction of VanEck Multi i.e., VanEck Multi and SPDR Dow go up and down completely randomly.
Pair Corralation between VanEck Multi and SPDR Dow
Assuming the 90 days trading horizon VanEck Multi is expected to generate 1.59 times less return on investment than SPDR Dow. But when comparing it to its historical volatility, VanEck Multi Asset Balanced is 1.41 times less risky than SPDR Dow. It trades about 0.08 of its potential returns per unit of risk. SPDR Dow Jones is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 30,354 in SPDR Dow Jones on September 12, 2024 and sell it today you would earn a total of 12,031 from holding SPDR Dow Jones or generate 39.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
VanEck Multi Asset Balanced vs. SPDR Dow Jones
Performance |
| Timeline |
| VanEck Multi Asset |
| SPDR Dow Jones |
VanEck Multi and SPDR Dow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Multi and SPDR Dow
The main advantage of trading using opposite VanEck Multi and SPDR Dow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Multi position performs unexpectedly, SPDR Dow 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 SPDR Dow will offset losses from the drop in SPDR Dow's long position.| VanEck Multi vs. SPDR Dow Jones | VanEck Multi vs. iShares Core MSCI | VanEck Multi vs. iShares SP 500 | VanEck Multi vs. Vanguard FTSE All World |
| SPDR Dow vs. iShares Core MSCI | SPDR Dow vs. iShares SP 500 | SPDR Dow vs. Vanguard FTSE All World | SPDR Dow vs. iShares Core MSCI |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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