Correlation Between VanEck Vectors and VanEck MSCI
Can any of the company-specific risk be diversified away by investing in both VanEck Vectors 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 VanEck Vectors and VanEck MSCI 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 VanEck MSCI International, you can compare the effects of market volatilities on VanEck Vectors 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 VanEck Vectors with a short position of VanEck MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Vectors and VanEck MSCI.
Diversification Opportunities for VanEck Vectors and VanEck MSCI
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VanEck and VanEck is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vectors MSCI 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 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 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 VanEck Vectors i.e., VanEck Vectors and VanEck MSCI go up and down completely randomly.
Pair Corralation between VanEck Vectors and VanEck MSCI
Assuming the 90 days trading horizon VanEck Vectors is expected to generate 4.47 times less return on investment than VanEck MSCI. In addition to that, VanEck Vectors is 1.18 times more volatile than VanEck MSCI International. It trades about 0.04 of its total potential returns per unit of risk. VanEck MSCI International is currently generating about 0.22 per unit of volatility. 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 | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Vectors MSCI vs. VanEck MSCI International
Performance |
| Timeline |
| VanEck Vectors MSCI |
| VanEck MSCI International |
VanEck Vectors and VanEck MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Vectors and VanEck MSCI
The main advantage of trading using opposite VanEck Vectors and VanEck MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Vectors 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.| VanEck Vectors vs. BetaShares Global Banks | VanEck Vectors vs. Beta Shares SPASX | VanEck Vectors vs. SPDR SPASX 200 | VanEck Vectors vs. Vanguard Australian Property |
| VanEck MSCI vs. CD Private Equity | VanEck MSCI vs. SPDR SPASX 200 | VanEck MSCI vs. Ecofibre | VanEck MSCI vs. iShares Global Healthcare |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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