Correlation Between VanEck Inflation and MKAM ETF
Can any of the company-specific risk be diversified away by investing in both VanEck Inflation and MKAM ETF 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 Inflation and MKAM ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Inflation Allocation and MKAM ETF, you can compare the effects of market volatilities on VanEck Inflation and MKAM ETF 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 Inflation with a short position of MKAM ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Inflation and MKAM ETF.
Diversification Opportunities for VanEck Inflation and MKAM ETF
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VanEck and MKAM is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Inflation Allocation and MKAM ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MKAM ETF and VanEck Inflation 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 Inflation Allocation are associated (or correlated) with MKAM ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MKAM ETF has no effect on the direction of VanEck Inflation i.e., VanEck Inflation and MKAM ETF go up and down completely randomly.
Pair Corralation between VanEck Inflation and MKAM ETF
Given the investment horizon of 90 days VanEck Inflation Allocation is expected to generate 1.57 times more return on investment than MKAM ETF. However, VanEck Inflation is 1.57 times more volatile than MKAM ETF. It trades about 0.12 of its potential returns per unit of risk. MKAM ETF is currently generating about 0.12 per unit of risk. If you would invest 2,712 in VanEck Inflation Allocation on September 1, 2024 and sell it today you would earn a total of 309.00 from holding VanEck Inflation Allocation or generate 11.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
VanEck Inflation Allocation vs. MKAM ETF
Performance |
| Timeline |
| VanEck Inflation All |
| MKAM ETF |
VanEck Inflation and MKAM ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Inflation and MKAM ETF
The main advantage of trading using opposite VanEck Inflation and MKAM ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Inflation position performs unexpectedly, MKAM ETF 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 MKAM ETF will offset losses from the drop in MKAM ETF's long position.| VanEck Inflation vs. iShares Core Growth | VanEck Inflation vs. ClearShares OCIO ETF | VanEck Inflation vs. Collaborative Investment Series | VanEck Inflation vs. Northern Lights |
| MKAM ETF vs. FT Vest Equity | MKAM ETF vs. Northern Lights | MKAM ETF vs. Dimensional International High | MKAM ETF vs. Matthews China Discovery |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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