Correlation Between VanEck Low and SPDR Kensho
Can any of the company-specific risk be diversified away by investing in both VanEck Low and SPDR Kensho 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 Low and SPDR Kensho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Low Carbon and SPDR Kensho Clean, you can compare the effects of market volatilities on VanEck Low and SPDR Kensho 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 Low with a short position of SPDR Kensho. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Low and SPDR Kensho.
Diversification Opportunities for VanEck Low and SPDR Kensho
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between VanEck and SPDR is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Low Carbon and SPDR Kensho Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Kensho Clean and VanEck Low 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 Low Carbon are associated (or correlated) with SPDR Kensho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Kensho Clean has no effect on the direction of VanEck Low i.e., VanEck Low and SPDR Kensho go up and down completely randomly.
Pair Corralation between VanEck Low and SPDR Kensho
Given the investment horizon of 90 days VanEck Low Carbon is expected to generate 0.61 times more return on investment than SPDR Kensho. However, VanEck Low Carbon is 1.65 times less risky than SPDR Kensho. It trades about 0.02 of its potential returns per unit of risk. SPDR Kensho Clean is currently generating about -0.07 per unit of risk. If you would invest 9,870 in VanEck Low Carbon on November 3, 2024 and sell it today you would earn a total of 45.00 from holding VanEck Low Carbon or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
VanEck Low Carbon vs. SPDR Kensho Clean
Performance |
| Timeline |
| VanEck Low Carbon |
| SPDR Kensho Clean |
VanEck Low and SPDR Kensho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Low and SPDR Kensho
The main advantage of trading using opposite VanEck Low and SPDR Kensho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Low position performs unexpectedly, SPDR Kensho 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 SPDR Kensho will offset losses from the drop in SPDR Kensho's long position.| VanEck Low vs. ALPS Clean Energy | VanEck Low vs. SPDR Kensho Clean | VanEck Low vs. Invesco Global Clean | VanEck Low vs. First Trust NASDAQ |
| SPDR Kensho vs. ALPS Clean Energy | SPDR Kensho vs. VanEck Low Carbon | SPDR Kensho vs. Invesco Global Clean | SPDR Kensho vs. SPDR Kensho New |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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