Correlation Between VanEck Vectors and SPDR SPASX
Can any of the company-specific risk be diversified away by investing in both VanEck Vectors and SPDR SPASX 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 Vectors and SPDR SPASX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Vectors MSCI and SPDR SPASX Australian, you can compare the effects of market volatilities on VanEck Vectors and SPDR SPASX 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 Vectors with a short position of SPDR SPASX. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Vectors and SPDR SPASX.
Diversification Opportunities for VanEck Vectors and SPDR SPASX
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and SPDR is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vectors MSCI and SPDR SPASX Australian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SPASX Australian and VanEck Vectors 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 Vectors MSCI are associated (or correlated) with SPDR SPASX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SPASX Australian has no effect on the direction of VanEck Vectors i.e., VanEck Vectors and SPDR SPASX go up and down completely randomly.
Pair Corralation between VanEck Vectors and SPDR SPASX
Assuming the 90 days trading horizon VanEck Vectors MSCI is expected to generate 1.78 times more return on investment than SPDR SPASX. However, VanEck Vectors is 1.78 times more volatile than SPDR SPASX Australian. It trades about 0.34 of its potential returns per unit of risk. SPDR SPASX Australian is currently generating about 0.1 per unit of risk. If you would invest 5,844 in VanEck Vectors MSCI on November 3, 2024 and sell it today you would earn a total of 217.00 from holding VanEck Vectors MSCI or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Vectors MSCI vs. SPDR SPASX Australian
Performance |
| Timeline |
| VanEck Vectors MSCI |
| SPDR SPASX Australian |
VanEck Vectors and SPDR SPASX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Vectors and SPDR SPASX
The main advantage of trading using opposite VanEck Vectors and SPDR SPASX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Vectors position performs unexpectedly, SPDR SPASX 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 SPDR SPASX will offset losses from the drop in SPDR SPASX's long position.| VanEck Vectors vs. ETFS Morningstar Global | VanEck Vectors vs. BetaShares Geared Equity | VanEck Vectors vs. iSharesGlobal 100 | VanEck Vectors vs. VanEck Vectors Australian |
| SPDR SPASX vs. ETFS Morningstar Global | SPDR SPASX vs. BetaShares Geared Equity | SPDR SPASX vs. iSharesGlobal 100 | SPDR SPASX vs. VanEck Vectors 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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