Correlation Between NYSE Composite and VanEck ETF
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and VanEck ETF 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 ETF 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 ETF Trust, you can compare the effects of market volatilities on NYSE Composite and VanEck ETF 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 ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and VanEck ETF.
Diversification Opportunities for NYSE Composite and VanEck ETF
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and VanEck is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and VanEck ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck ETF Trust 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 ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck ETF Trust has no effect on the direction of NYSE Composite i.e., NYSE Composite and VanEck ETF go up and down completely randomly.
Pair Corralation between NYSE Composite and VanEck ETF
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.84 times more return on investment than VanEck ETF. However, NYSE Composite is 1.2 times less risky than VanEck ETF. It trades about 0.41 of its potential returns per unit of risk. VanEck ETF Trust is currently generating about 0.3 per unit of risk. If you would invest 1,925,354 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 101,850 from holding NYSE Composite or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. VanEck ETF Trust
Performance |
| Timeline |
NYSE Composite and VanEck ETF Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
VanEck ETF Trust
Pair trading matchups for VanEck ETF
Pair Trading with NYSE Composite and VanEck ETF
The main advantage of trading using opposite NYSE Composite and VanEck ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, VanEck ETF 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 ETF will offset losses from the drop in VanEck ETF's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| VanEck ETF vs. VanEck Morningstar International | VanEck ETF vs. VanEck Vectors ETF | VanEck ETF vs. BlackRock Carbon Transition | VanEck ETF vs. VanEck Morningstar Wide |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |