Correlation Between VanEck ETF and ETF Series
Can any of the company-specific risk be diversified away by investing in both VanEck ETF and ETF Series 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 ETF and ETF Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck ETF Trust and ETF Series Solutions, you can compare the effects of market volatilities on VanEck ETF and ETF Series 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 ETF with a short position of ETF Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck ETF and ETF Series.
Diversification Opportunities for VanEck ETF and ETF Series
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and ETF is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding VanEck ETF Trust and ETF Series Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Series Solutions and VanEck ETF 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 ETF Trust are associated (or correlated) with ETF Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Series Solutions has no effect on the direction of VanEck ETF i.e., VanEck ETF and ETF Series go up and down completely randomly.
Pair Corralation between VanEck ETF and ETF Series
Given the investment horizon of 90 days VanEck ETF Trust is expected to generate 1.08 times more return on investment than ETF Series. However, VanEck ETF is 1.08 times more volatile than ETF Series Solutions. It trades about 0.46 of its potential returns per unit of risk. ETF Series Solutions is currently generating about 0.24 per unit of risk. If you would invest 3,435 in VanEck ETF Trust on November 3, 2024 and sell it today you would earn a total of 238.00 from holding VanEck ETF Trust or generate 6.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck ETF Trust vs. ETF Series Solutions
Performance |
| Timeline |
| VanEck ETF Trust |
| ETF Series Solutions |
VanEck ETF and ETF Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck ETF and ETF Series
The main advantage of trading using opposite VanEck ETF and ETF Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck ETF position performs unexpectedly, ETF Series 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 ETF Series will offset losses from the drop in ETF Series' long position.| VanEck ETF vs. VanEck Morningstar International | VanEck ETF vs. VanEck Vectors ETF | VanEck ETF vs. VanEck Morningstar Wide | VanEck ETF vs. VanEck Inflation Allocation |
| ETF Series vs. Distillate Fundamental Stability | ETF Series vs. ETF Series Solutions | ETF Series vs. Fairlead Tactical Sector | ETF Series vs. VanEck ETF Trust |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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