Correlation Between VanEck Vectors and VanEck Long
Can any of the company-specific risk be diversified away by investing in both VanEck Vectors and VanEck Long 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 Long 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 Long Muni, you can compare the effects of market volatilities on VanEck Vectors and VanEck Long 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 Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Vectors and VanEck Long.
Diversification Opportunities for VanEck Vectors and VanEck Long
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and VanEck is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vectors ETF and VanEck Long Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Long Muni 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 Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Long Muni has no effect on the direction of VanEck Vectors i.e., VanEck Vectors and VanEck Long go up and down completely randomly.
Pair Corralation between VanEck Vectors and VanEck Long
Considering the 90-day investment horizon VanEck Vectors ETF is expected to generate 0.7 times more return on investment than VanEck Long. However, VanEck Vectors ETF is 1.43 times less risky than VanEck Long. It trades about -0.03 of its potential returns per unit of risk. VanEck Long Muni is currently generating about -0.04 per unit of risk. If you would invest 4,607 in VanEck Vectors ETF on November 5, 2024 and sell it today you would lose (7.00) from holding VanEck Vectors ETF or give up 0.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Vectors ETF vs. VanEck Long Muni
Performance |
| Timeline |
| VanEck Vectors ETF |
| VanEck Long Muni |
VanEck Vectors and VanEck Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Vectors and VanEck Long
The main advantage of trading using opposite VanEck Vectors and VanEck Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Vectors position performs unexpectedly, VanEck Long 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 Long will offset losses from the drop in VanEck Long'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 |
| VanEck Long vs. VanEck Intermediate Muni | VanEck Long vs. VanEck Short Muni | VanEck Long vs. Invesco National AMT Free | VanEck Long vs. SPDR Nuveen Bloomberg |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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