Correlation Between VanEck IBoxx and VanEck Multi
Can any of the company-specific risk be diversified away by investing in both VanEck IBoxx and VanEck Multi 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 IBoxx and VanEck Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck iBoxx EUR and VanEck Multi Asset Balanced, you can compare the effects of market volatilities on VanEck IBoxx and VanEck Multi 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 IBoxx with a short position of VanEck Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck IBoxx and VanEck Multi.
Diversification Opportunities for VanEck IBoxx and VanEck Multi
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VanEck and VanEck is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding VanEck iBoxx EUR and VanEck Multi Asset Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Multi Asset and VanEck IBoxx 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 iBoxx EUR are associated (or correlated) with VanEck Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Multi Asset has no effect on the direction of VanEck IBoxx i.e., VanEck IBoxx and VanEck Multi go up and down completely randomly.
Pair Corralation between VanEck IBoxx and VanEck Multi
Assuming the 90 days trading horizon VanEck IBoxx is expected to generate 4.54 times less return on investment than VanEck Multi. But when comparing it to its historical volatility, VanEck iBoxx EUR is 1.41 times less risky than VanEck Multi. It trades about 0.05 of its potential returns per unit of risk. VanEck Multi Asset Balanced is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 6,343 in VanEck Multi Asset Balanced on September 5, 2024 and sell it today you would earn a total of 978.00 from holding VanEck Multi Asset Balanced or generate 15.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck iBoxx EUR vs. VanEck Multi Asset Balanced
Performance |
| Timeline |
| VanEck iBoxx EUR |
| VanEck Multi Asset |
VanEck IBoxx and VanEck Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck IBoxx and VanEck Multi
The main advantage of trading using opposite VanEck IBoxx and VanEck Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck IBoxx position performs unexpectedly, VanEck Multi 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 Multi will offset losses from the drop in VanEck Multi's long position.| VanEck IBoxx vs. HSBC MSCI Japan | VanEck IBoxx vs. iShares II Public | VanEck IBoxx vs. Hydratec Industries NV | VanEck IBoxx vs. VanEck Polkadot ETN |
| VanEck Multi vs. HSBC MSCI Japan | VanEck Multi vs. iShares II Public | VanEck Multi vs. Hydratec Industries NV | VanEck Multi vs. VanEck Polkadot ETN |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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