Correlation Between VanEck Vectors and Global X
Can any of the company-specific risk be diversified away by investing in both VanEck Vectors and Global X 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 Global X 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 Global X Infrastructure, you can compare the effects of market volatilities on VanEck Vectors and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Vectors and Global X.
Diversification Opportunities for VanEck Vectors and Global X
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VanEck and Global is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vectors ETF and Global X Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Infrastructure 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Infrastructure has no effect on the direction of VanEck Vectors i.e., VanEck Vectors and Global X go up and down completely randomly.
Pair Corralation between VanEck Vectors and Global X
Considering the 90-day investment horizon VanEck Vectors is expected to generate 8.87 times less return on investment than Global X. But when comparing it to its historical volatility, VanEck Vectors ETF is 4.2 times less risky than Global X. It trades about 0.05 of its potential returns per unit of risk. Global X Infrastructure is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,761 in Global X Infrastructure on August 30, 2024 and sell it today you would earn a total of 1,798 from holding Global X Infrastructure or generate 65.12% 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. Global X Infrastructure
Performance |
| Timeline |
| VanEck Vectors ETF |
| Global X Infrastructure |
VanEck Vectors and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Vectors and Global X
The main advantage of trading using opposite VanEck Vectors and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Vectors position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X'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 |
| Global X vs. iShares Infrastructure ETF | Global X vs. Global X Cloud | Global X vs. Global X Cybersecurity | Global X vs. Invesco Dynamic Leisure |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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