Correlation Between VanEck Vectors and LeaderSharesTM AlphaFactor
Can any of the company-specific risk be diversified away by investing in both VanEck Vectors and LeaderSharesTM AlphaFactor 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 LeaderSharesTM AlphaFactor 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 LeaderSharesTM AlphaFactor Core, you can compare the effects of market volatilities on VanEck Vectors and LeaderSharesTM AlphaFactor 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 LeaderSharesTM AlphaFactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Vectors and LeaderSharesTM AlphaFactor.
Diversification Opportunities for VanEck Vectors and LeaderSharesTM AlphaFactor
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between VanEck and LeaderSharesTM is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vectors ETF and LeaderSharesTM AlphaFactor Cor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LeaderSharesTM AlphaFactor 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 LeaderSharesTM AlphaFactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LeaderSharesTM AlphaFactor has no effect on the direction of VanEck Vectors i.e., VanEck Vectors and LeaderSharesTM AlphaFactor go up and down completely randomly.
Pair Corralation between VanEck Vectors and LeaderSharesTM AlphaFactor
Considering the 90-day investment horizon VanEck Vectors is expected to generate 7.69 times less return on investment than LeaderSharesTM AlphaFactor. But when comparing it to its historical volatility, VanEck Vectors ETF is 2.66 times less risky than LeaderSharesTM AlphaFactor. It trades about 0.13 of its potential returns per unit of risk. LeaderSharesTM AlphaFactor Core is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 4,096 in LeaderSharesTM AlphaFactor Core on September 3, 2024 and sell it today you would earn a total of 323.00 from holding LeaderSharesTM AlphaFactor Core or generate 7.89% 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. LeaderSharesTM AlphaFactor Cor
Performance |
| Timeline |
| VanEck Vectors ETF |
| LeaderSharesTM AlphaFactor |
VanEck Vectors and LeaderSharesTM AlphaFactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Vectors and LeaderSharesTM AlphaFactor
The main advantage of trading using opposite VanEck Vectors and LeaderSharesTM AlphaFactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Vectors position performs unexpectedly, LeaderSharesTM AlphaFactor 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 LeaderSharesTM AlphaFactor will offset losses from the drop in LeaderSharesTM AlphaFactor'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 |
| LeaderSharesTM AlphaFactor vs. Sonida Senior Living | LeaderSharesTM AlphaFactor vs. The9 Ltd ADR | LeaderSharesTM AlphaFactor vs. VanEck Vectors ETF | LeaderSharesTM AlphaFactor vs. Nine Energy Service |
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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