Correlation Between VanEck Vectors and VanEck Investment
Can any of the company-specific risk be diversified away by investing in both VanEck Vectors and VanEck Investment 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 VanEck Investment 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 VanEck Investment Grade, you can compare the effects of market volatilities on VanEck Vectors and VanEck Investment 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 VanEck Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Vectors and VanEck Investment.
Diversification Opportunities for VanEck Vectors and VanEck Investment
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VanEck and VanEck is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vectors ETF and VanEck Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Investment Grade 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 VanEck Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Investment Grade has no effect on the direction of VanEck Vectors i.e., VanEck Vectors and VanEck Investment go up and down completely randomly.
Pair Corralation between VanEck Vectors and VanEck Investment
Considering the 90-day investment horizon VanEck Vectors ETF is expected to generate 3.41 times more return on investment than VanEck Investment. However, VanEck Vectors is 3.41 times more volatile than VanEck Investment Grade. It trades about 0.11 of its potential returns per unit of risk. VanEck Investment Grade is currently generating about 0.32 per unit of risk. If you would invest 4,498 in VanEck Vectors ETF on August 26, 2024 and sell it today you would earn a total of 151.00 from holding VanEck Vectors ETF or generate 3.36% 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. VanEck Investment Grade
Performance |
| Timeline |
| VanEck Vectors ETF |
| VanEck Investment Grade |
VanEck Vectors and VanEck Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Vectors and VanEck Investment
The main advantage of trading using opposite VanEck Vectors and VanEck Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Vectors position performs unexpectedly, VanEck Investment 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 VanEck Investment will offset losses from the drop in VanEck Investment's long position.| VanEck Vectors vs. Franklin Liberty Intermediate | VanEck Vectors vs. IQ MacKay Municipal | VanEck Vectors vs. Hartford Municipal Opportunities | VanEck Vectors vs. IQ MacKay Municipal |
| VanEck Investment vs. SPDR Bloomberg Investment | VanEck Investment vs. iShares Floating Rate | VanEck Investment vs. SPDR Barclays Long | VanEck Investment vs. Invesco Variable Rate |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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