Correlation Between NYSE Composite and VanEck ChiNext
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and VanEck ChiNext 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 NYSE Composite and VanEck ChiNext into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and VanEck ChiNext ETF, you can compare the effects of market volatilities on NYSE Composite and VanEck ChiNext 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 NYSE Composite with a short position of VanEck ChiNext. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and VanEck ChiNext.
Diversification Opportunities for NYSE Composite and VanEck ChiNext
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and VanEck is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and VanEck ChiNext ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck ChiNext ETF and NYSE Composite 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 NYSE Composite are associated (or correlated) with VanEck ChiNext. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck ChiNext ETF has no effect on the direction of NYSE Composite i.e., NYSE Composite and VanEck ChiNext go up and down completely randomly.
Pair Corralation between NYSE Composite and VanEck ChiNext
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.29 times more return on investment than VanEck ChiNext. However, NYSE Composite is 3.43 times less risky than VanEck ChiNext. It trades about 0.08 of its potential returns per unit of risk. VanEck ChiNext ETF is currently generating about 0.01 per unit of risk. If you would invest 1,547,479 in NYSE Composite on August 25, 2024 and sell it today you would earn a total of 464,866 from holding NYSE Composite or generate 30.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. VanEck ChiNext ETF
Performance |
| Timeline |
NYSE Composite and VanEck ChiNext Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
VanEck ChiNext ETF
Pair trading matchups for VanEck ChiNext
Pair Trading with NYSE Composite and VanEck ChiNext
The main advantage of trading using opposite NYSE Composite and VanEck ChiNext positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, VanEck ChiNext 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 ChiNext will offset losses from the drop in VanEck ChiNext's long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| VanEck ChiNext vs. Freedom Day Dividend | VanEck ChiNext vs. Davis Select International | VanEck ChiNext vs. iShares MSCI China | VanEck ChiNext vs. SmartETFs Dividend Builder |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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