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
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VanEck and VanEck is 0.59. 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 International is expected to generate 1.3 times more return on investment than VanEck FTSE. However, VanEck MSCI is 1.3 times more volatile than VanEck FTSE China. It trades about 0.22 of its potential returns per unit of risk. VanEck FTSE China is currently generating about -0.12 per unit of risk. If you would invest 2,942 in VanEck MSCI International on August 26, 2024 and sell it today you would earn a total of 185.00 from holding VanEck MSCI International or generate 6.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| 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. CD Private Equity | VanEck MSCI vs. SPDR SPASX 200 | VanEck MSCI vs. Ecofibre | VanEck MSCI vs. iShares Global Healthcare |
| VanEck FTSE vs. Betashares Asia Technology | VanEck FTSE vs. CD Private Equity | VanEck FTSE vs. BetaShares Australia 200 | VanEck FTSE vs. Australian High Interest |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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