Correlation Between Perpetual Credit and VanEck MSCI
Can any of the company-specific risk be diversified away by investing in both Perpetual Credit and VanEck MSCI 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 Perpetual Credit and VanEck MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perpetual Credit Income and VanEck MSCI International, you can compare the effects of market volatilities on Perpetual Credit and VanEck MSCI 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 Perpetual Credit with a short position of VanEck MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perpetual Credit and VanEck MSCI.
Diversification Opportunities for Perpetual Credit and VanEck MSCI
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Perpetual and VanEck is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Perpetual Credit Income and VanEck MSCI International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck MSCI International and Perpetual Credit 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 Perpetual Credit Income are associated (or correlated) with VanEck MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck MSCI International has no effect on the direction of Perpetual Credit i.e., Perpetual Credit and VanEck MSCI go up and down completely randomly.
Pair Corralation between Perpetual Credit and VanEck MSCI
Assuming the 90 days trading horizon Perpetual Credit is expected to generate 6.26 times less return on investment than VanEck MSCI. But when comparing it to its historical volatility, Perpetual Credit Income is 1.04 times less risky than VanEck MSCI. It trades about 0.04 of its potential returns per unit of risk. VanEck MSCI International is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,993 in VanEck MSCI International on September 1, 2024 and sell it today you would earn a total of 203.00 from holding VanEck MSCI International or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Perpetual Credit Income vs. VanEck MSCI International
Performance |
| Timeline |
| Perpetual Credit Income |
| VanEck MSCI International |
Perpetual Credit and VanEck MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perpetual Credit and VanEck MSCI
The main advantage of trading using opposite Perpetual Credit and VanEck MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perpetual Credit position performs unexpectedly, VanEck MSCI 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 MSCI will offset losses from the drop in VanEck MSCI's long position.| Perpetual Credit vs. ABACUS STORAGE KING | Perpetual Credit vs. Midway | Perpetual Credit vs. Aristocrat Leisure | Perpetual Credit vs. Imricor Medical Systems |
| VanEck MSCI vs. Champion Iron | VanEck MSCI vs. Australian Dairy Farms | VanEck MSCI vs. Perpetual Credit Income | VanEck MSCI vs. Greentech Metals |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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