Correlation Between VanEck Inflation and STF Tactical
Can any of the company-specific risk be diversified away by investing in both VanEck Inflation and STF Tactical 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 STF Tactical 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 STF Tactical Growth, you can compare the effects of market volatilities on VanEck Inflation and STF Tactical 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 STF Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Inflation and STF Tactical.
Diversification Opportunities for VanEck Inflation and STF Tactical
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and STF is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Inflation Allocation and STF Tactical Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STF Tactical Growth 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 STF Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STF Tactical Growth has no effect on the direction of VanEck Inflation i.e., VanEck Inflation and STF Tactical go up and down completely randomly.
Pair Corralation between VanEck Inflation and STF Tactical
Given the investment horizon of 90 days VanEck Inflation is expected to generate 1.68 times less return on investment than STF Tactical. But when comparing it to its historical volatility, VanEck Inflation Allocation is 1.31 times less risky than STF Tactical. It trades about 0.07 of its potential returns per unit of risk. STF Tactical Growth is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,447 in STF Tactical Growth on August 24, 2024 and sell it today you would earn a total of 1,013 from holding STF Tactical Growth or generate 41.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Inflation Allocation vs. STF Tactical Growth
Performance |
| Timeline |
| VanEck Inflation All |
| STF Tactical Growth |
VanEck Inflation and STF Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Inflation and STF Tactical
The main advantage of trading using opposite VanEck Inflation and STF Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Inflation position performs unexpectedly, STF Tactical 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 STF Tactical will offset losses from the drop in STF Tactical's long position.| VanEck Inflation vs. iShares Core Growth | VanEck Inflation vs. Alpha Architect Gdsdn | VanEck Inflation vs. ClearShares OCIO ETF | VanEck Inflation vs. Collaborative Investment Series |
| STF Tactical vs. iShares Core Growth | STF Tactical vs. Alpha Architect Gdsdn | STF Tactical vs. ClearShares OCIO ETF | STF Tactical vs. Collaborative Investment Series |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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