Correlation Between VanEck Vectors and AB Active
Can any of the company-specific risk be diversified away by investing in both VanEck Vectors and AB Active 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 AB Active 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 AB Active ETFs,, you can compare the effects of market volatilities on VanEck Vectors and AB Active 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 AB Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Vectors and AB Active.
Diversification Opportunities for VanEck Vectors and AB Active
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between VanEck and TAFL is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vectors ETF and AB Active ETFs, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Active ETFs, 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 AB Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Active ETFs, has no effect on the direction of VanEck Vectors i.e., VanEck Vectors and AB Active go up and down completely randomly.
Pair Corralation between VanEck Vectors and AB Active
Considering the 90-day investment horizon VanEck Vectors is expected to generate 1.54 times less return on investment than AB Active. But when comparing it to its historical volatility, VanEck Vectors ETF is 1.2 times less risky than AB Active. It trades about 0.13 of its potential returns per unit of risk. AB Active ETFs, is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,536 in AB Active ETFs, on September 3, 2024 and sell it today you would earn a total of 39.00 from holding AB Active ETFs, or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Vectors ETF vs. AB Active ETFs,
Performance |
| Timeline |
| VanEck Vectors ETF |
| AB Active ETFs, |
VanEck Vectors and AB Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Vectors and AB Active
The main advantage of trading using opposite VanEck Vectors and AB Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Vectors position performs unexpectedly, AB Active 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 AB Active will offset losses from the drop in AB Active'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 |
| AB Active vs. SSGA Active Trust | AB Active vs. SPDR Nuveen Municipal | AB Active vs. iShares Short Maturity | AB Active vs. First Trust Flexible |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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