Correlation Between AXS 2X and VanEck China
Can any of the company-specific risk be diversified away by investing in both AXS 2X and VanEck China 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 AXS 2X and VanEck China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXS 2X Innovation and VanEck China Bond, you can compare the effects of market volatilities on AXS 2X and VanEck China 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 AXS 2X with a short position of VanEck China. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXS 2X and VanEck China.
Diversification Opportunities for AXS 2X and VanEck China
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AXS and VanEck is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding AXS 2X Innovation and VanEck China Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck China Bond and AXS 2X 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 AXS 2X Innovation are associated (or correlated) with VanEck China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck China Bond has no effect on the direction of AXS 2X i.e., AXS 2X and VanEck China go up and down completely randomly.
Pair Corralation between AXS 2X and VanEck China
Given the investment horizon of 90 days AXS 2X Innovation is expected to generate 17.91 times more return on investment than VanEck China. However, AXS 2X is 17.91 times more volatile than VanEck China Bond. It trades about 0.02 of its potential returns per unit of risk. VanEck China Bond is currently generating about 0.04 per unit of risk. If you would invest 5,254 in AXS 2X Innovation on August 30, 2024 and sell it today you would lose (730.00) from holding AXS 2X Innovation or give up 13.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AXS 2X Innovation vs. VanEck China Bond
Performance |
| Timeline |
| AXS 2X Innovation |
| VanEck China Bond |
AXS 2X and VanEck China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXS 2X and VanEck China
The main advantage of trading using opposite AXS 2X and VanEck China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXS 2X position performs unexpectedly, VanEck China 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 China will offset losses from the drop in VanEck China's long position.| AXS 2X vs. Tuttle Capital Short | AXS 2X vs. Direxion Shares ETF | AXS 2X vs. AXS TSLA Bear | AXS 2X vs. 2x Long VIX |
| VanEck China vs. SPDR Bloomberg Emerging | VanEck China vs. Vanguard Emerging Markets | VanEck China vs. SPDR Bloomberg Barclays | VanEck China vs. VanEck JP Morgan |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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