Correlation Between VanEck Steel and US Global
Can any of the company-specific risk be diversified away by investing in both VanEck Steel and US Global 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 Steel and US Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Steel ETF and US Global Sea, you can compare the effects of market volatilities on VanEck Steel and US Global 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 Steel with a short position of US Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Steel and US Global.
Diversification Opportunities for VanEck Steel and US Global
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between VanEck and SEA is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Steel ETF and US Global Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Global Sea and VanEck Steel 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 Steel ETF are associated (or correlated) with US Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Global Sea has no effect on the direction of VanEck Steel i.e., VanEck Steel and US Global go up and down completely randomly.
Pair Corralation between VanEck Steel and US Global
Considering the 90-day investment horizon VanEck Steel ETF is expected to generate 1.37 times more return on investment than US Global. However, VanEck Steel is 1.37 times more volatile than US Global Sea. It trades about 0.12 of its potential returns per unit of risk. US Global Sea is currently generating about -0.09 per unit of risk. If you would invest 6,334 in VanEck Steel ETF on September 2, 2024 and sell it today you would earn a total of 797.00 from holding VanEck Steel ETF or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Steel ETF vs. US Global Sea
Performance |
| Timeline |
| VanEck Steel ETF |
| US Global Sea |
VanEck Steel and US Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Steel and US Global
The main advantage of trading using opposite VanEck Steel and US Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Steel position performs unexpectedly, US Global 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 US Global will offset losses from the drop in US Global's long position.| VanEck Steel vs. Mast Global Battery | VanEck Steel vs. Materials Select Sector | VanEck Steel vs. Vanguard Materials Index | VanEck Steel vs. SPDR SP Metals |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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