Correlation Between VanEck Oil and Global X
Can any of the company-specific risk be diversified away by investing in both VanEck Oil and Global X 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 Global X 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 Global X Funds, you can compare the effects of market volatilities on VanEck Oil and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Oil and Global X.
Diversification Opportunities for VanEck Oil and Global X
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VanEck and Global is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Oil Services and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Funds has no effect on the direction of VanEck Oil i.e., VanEck Oil and Global X go up and down completely randomly.
Pair Corralation between VanEck Oil and Global X
Considering the 90-day investment horizon VanEck Oil is expected to generate 16.88 times less return on investment than Global X. In addition to that, VanEck Oil is 1.91 times more volatile than Global X Funds. It trades about 0.0 of its total potential returns per unit of risk. Global X Funds is currently generating about 0.15 per unit of volatility. If you would invest 2,454 in Global X Funds on October 20, 2024 and sell it today you would earn a total of 1,452 from holding Global X Funds or generate 59.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 68.48% |
| Values | Daily Returns |
VanEck Oil Services vs. Global X Funds
Performance |
| Timeline |
| VanEck Oil Services |
| Global X Funds |
VanEck Oil and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Oil and Global X
The main advantage of trading using opposite VanEck Oil and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Oil position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| VanEck Oil vs. SPDR SP Oil | VanEck Oil vs. Energy Select Sector | VanEck Oil vs. VanEck Semiconductor ETF | VanEck Oil vs. Materials Select Sector |
| Global X vs. First Trust Exchange Traded | Global X vs. Ultimus Managers Trust | Global X vs. Horizon Kinetics Medical | Global X vs. Harbor Health Care |
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 Stocks Directory module to find actively traded stocks across global markets.
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