Correlation Between VanEck MSCI and VanEck FTSE
Can any of the company-specific risk be diversified away by investing in both VanEck MSCI and VanEck FTSE 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 MSCI and VanEck FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck MSCI International and VanEck FTSE China, you can compare the effects of market volatilities on VanEck MSCI and VanEck FTSE 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 MSCI with a short position of VanEck FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck MSCI and VanEck FTSE.
Diversification Opportunities for VanEck MSCI and VanEck FTSE
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between VanEck and VanEck is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding VanEck MSCI International and VanEck FTSE China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck FTSE China and VanEck MSCI 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 MSCI International are associated (or correlated) with VanEck FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck FTSE China has no effect on the direction of VanEck MSCI i.e., VanEck MSCI and VanEck FTSE go up and down completely randomly.
Pair Corralation between VanEck MSCI and VanEck FTSE
Assuming the 90 days trading horizon VanEck MSCI is expected to generate 2.73 times less return on investment than VanEck FTSE. But when comparing it to its historical volatility, VanEck MSCI International is 1.43 times less risky than VanEck FTSE. It trades about 0.04 of its potential returns per unit of risk. VanEck FTSE China is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,450 in VanEck FTSE China on October 26, 2024 and sell it today you would earn a total of 199.00 from holding VanEck FTSE China or generate 3.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck MSCI International vs. VanEck FTSE China
Performance |
| Timeline |
| VanEck MSCI International |
| VanEck FTSE China |
VanEck MSCI and VanEck FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck MSCI and VanEck FTSE
The main advantage of trading using opposite VanEck MSCI and VanEck FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck MSCI position performs unexpectedly, VanEck FTSE 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 FTSE will offset losses from the drop in VanEck FTSE's long position.| VanEck MSCI vs. VanEck Vectors Australian | VanEck MSCI vs. VanEck FTSE China | VanEck MSCI vs. VanEck Global Clean | VanEck MSCI vs. VanEck MSCI Australian |
| VanEck FTSE vs. VanEck Vectors Australian | VanEck FTSE vs. VanEck MSCI International | VanEck FTSE vs. VanEck Global Clean | VanEck FTSE vs. VanEck MSCI Australian |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |