Correlation Between VanEck Oil and VanEck IBoxx
Can any of the company-specific risk be diversified away by investing in both VanEck Oil and VanEck IBoxx 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 Oil and VanEck IBoxx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Oil Services and VanEck iBoxx EUR, you can compare the effects of market volatilities on VanEck Oil and VanEck IBoxx 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 Oil with a short position of VanEck IBoxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Oil and VanEck IBoxx.
Diversification Opportunities for VanEck Oil and VanEck IBoxx
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VanEck and VanEck is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Oil Services and VanEck iBoxx EUR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck iBoxx EUR and VanEck Oil 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 Oil Services are associated (or correlated) with VanEck IBoxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck iBoxx EUR has no effect on the direction of VanEck Oil i.e., VanEck Oil and VanEck IBoxx go up and down completely randomly.
Pair Corralation between VanEck Oil and VanEck IBoxx
Assuming the 90 days trading horizon VanEck Oil Services is expected to generate 0.7 times more return on investment than VanEck IBoxx. However, VanEck Oil Services is 1.42 times less risky than VanEck IBoxx. It trades about 0.56 of its potential returns per unit of risk. VanEck iBoxx EUR is currently generating about -0.14 per unit of risk. If you would invest 1,856 in VanEck Oil Services on October 20, 2024 and sell it today you would earn a total of 268.00 from holding VanEck Oil Services or generate 14.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
VanEck Oil Services vs. VanEck iBoxx EUR
Performance |
| Timeline |
| VanEck Oil Services |
| VanEck iBoxx EUR |
VanEck Oil and VanEck IBoxx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Oil and VanEck IBoxx
The main advantage of trading using opposite VanEck Oil and VanEck IBoxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Oil position performs unexpectedly, VanEck IBoxx 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 IBoxx will offset losses from the drop in VanEck IBoxx's long position.| VanEck Oil vs. UBSFund Solutions MSCI | VanEck Oil vs. Vanguard SP 500 | VanEck Oil vs. iShares VII PLC | VanEck Oil vs. iShares Core SP |
| VanEck IBoxx vs. UBSFund Solutions MSCI | VanEck IBoxx vs. Vanguard SP 500 | VanEck IBoxx vs. iShares VII PLC | VanEck IBoxx vs. iShares Core SP |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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