Correlation Between VanEck MSCI and VanEck Global
Can any of the company-specific risk be diversified away by investing in both VanEck MSCI and VanEck Global 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 Global 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 Global Listed, you can compare the effects of market volatilities on VanEck MSCI and VanEck Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck MSCI and VanEck Global.
Diversification Opportunities for VanEck MSCI and VanEck Global
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VanEck and VanEck is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding VanEck MSCI International and VanEck Global Listed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Global Listed 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Global Listed has no effect on the direction of VanEck MSCI i.e., VanEck MSCI and VanEck Global go up and down completely randomly.
Pair Corralation between VanEck MSCI and VanEck Global
Assuming the 90 days trading horizon VanEck MSCI is expected to generate 1.41 times less return on investment than VanEck Global. But when comparing it to its historical volatility, VanEck MSCI International is 1.07 times less risky than VanEck Global. It trades about 0.1 of its potential returns per unit of risk. VanEck Global Listed is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,344 in VanEck Global Listed on September 13, 2024 and sell it today you would earn a total of 1,269 from holding VanEck Global Listed or generate 94.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck MSCI International vs. VanEck Global Listed
Performance |
| Timeline |
| VanEck MSCI International |
| VanEck Global Listed |
VanEck MSCI and VanEck Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck MSCI and VanEck Global
The main advantage of trading using opposite VanEck MSCI and VanEck Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck MSCI position performs unexpectedly, VanEck Global 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 Global will offset losses from the drop in VanEck Global'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 Global vs. VanEck Vectors Australian | VanEck Global vs. VanEck FTSE China | VanEck Global vs. VanEck MSCI International | VanEck Global vs. VanEck Global Clean |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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