Correlation Between FlexShares Credit and Vident International
Can any of the company-specific risk be diversified away by investing in both FlexShares Credit and Vident International 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 FlexShares Credit and Vident International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FlexShares Credit Scored Corporate and Vident International Equity, you can compare the effects of market volatilities on FlexShares Credit and Vident International 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 FlexShares Credit with a short position of Vident International. Check out your portfolio center. Please also check ongoing floating volatility patterns of FlexShares Credit and Vident International.
Diversification Opportunities for FlexShares Credit and Vident International
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between FlexShares and Vident is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding FlexShares Credit Scored Corpo and Vident International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vident International and FlexShares Credit 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 FlexShares Credit Scored Corporate are associated (or correlated) with Vident International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vident International has no effect on the direction of FlexShares Credit i.e., FlexShares Credit and Vident International go up and down completely randomly.
Pair Corralation between FlexShares Credit and Vident International
Given the investment horizon of 90 days FlexShares Credit Scored Corporate is expected to generate 0.24 times more return on investment than Vident International. However, FlexShares Credit Scored Corporate is 4.16 times less risky than Vident International. It trades about -0.12 of its potential returns per unit of risk. Vident International Equity is currently generating about -0.12 per unit of risk. If you would invest 4,880 in FlexShares Credit Scored Corporate on August 28, 2024 and sell it today you would lose (57.00) from holding FlexShares Credit Scored Corporate or give up 1.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FlexShares Credit Scored Corpo vs. Vident International Equity
Performance |
| Timeline |
| FlexShares Credit |
| Vident International |
FlexShares Credit and Vident International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FlexShares Credit and Vident International
The main advantage of trading using opposite FlexShares Credit and Vident International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FlexShares Credit position performs unexpectedly, Vident International 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 Vident International will offset losses from the drop in Vident International's long position.| FlexShares Credit vs. Senstar Technologies | FlexShares Credit vs. ImmuCell | FlexShares Credit vs. Anika Therapeutics | FlexShares Credit vs. Aquagold International |
| Vident International vs. Vident Core Equity | Vident International vs. Vident Core Bond | Vident International vs. iShares MSCI ACWI | Vident International vs. BMO Mid Federal |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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