Correlation Between VanEck Vectors and Barings Global
Can any of the company-specific risk be diversified away by investing in both VanEck Vectors and Barings 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 Vectors and Barings Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Vectors ETF and Barings Global Short, you can compare the effects of market volatilities on VanEck Vectors and Barings 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 Vectors with a short position of Barings Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Vectors and Barings Global.
Diversification Opportunities for VanEck Vectors and Barings Global
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VanEck and Barings is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vectors ETF and Barings Global Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Global Short 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 ETF are associated (or correlated) with Barings Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Global Short has no effect on the direction of VanEck Vectors i.e., VanEck Vectors and Barings Global go up and down completely randomly.
Pair Corralation between VanEck Vectors and Barings Global
Considering the 90-day investment horizon VanEck Vectors is expected to generate 4.17 times less return on investment than Barings Global. But when comparing it to its historical volatility, VanEck Vectors ETF is 3.21 times less risky than Barings Global. It trades about 0.11 of its potential returns per unit of risk. Barings Global Short is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,517 in Barings Global Short on August 27, 2024 and sell it today you would earn a total of 54.00 from holding Barings Global Short or generate 3.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Vectors ETF vs. Barings Global Short
Performance |
| Timeline |
| VanEck Vectors ETF |
| Barings Global Short |
VanEck Vectors and Barings Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Vectors and Barings Global
The main advantage of trading using opposite VanEck Vectors and Barings Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Vectors position performs unexpectedly, Barings 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 Barings Global will offset losses from the drop in Barings Global's long position.| VanEck Vectors vs. Formidable Fortress ETF | VanEck Vectors vs. Sonida Senior Living | VanEck Vectors vs. China Yuchai International | VanEck Vectors vs. Nine Energy Service |
| Barings Global vs. Western Asset Global | Barings Global vs. Western Asset High | Barings Global vs. Voya Global Advantage | Barings Global vs. Voya Global Equity |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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