Correlation Between VanEck IBoxx and VanEck Polkadot
Can any of the company-specific risk be diversified away by investing in both VanEck IBoxx and VanEck Polkadot 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 Polkadot 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 Polkadot ETN, you can compare the effects of market volatilities on VanEck IBoxx and VanEck Polkadot 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 Polkadot. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck IBoxx and VanEck Polkadot.
Diversification Opportunities for VanEck IBoxx and VanEck Polkadot
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between VanEck and VanEck is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding VanEck iBoxx EUR and VanEck Polkadot ETN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Polkadot ETN 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 Polkadot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Polkadot ETN has no effect on the direction of VanEck IBoxx i.e., VanEck IBoxx and VanEck Polkadot go up and down completely randomly.
Pair Corralation between VanEck IBoxx and VanEck Polkadot
Assuming the 90 days trading horizon VanEck IBoxx is expected to generate 144.21 times less return on investment than VanEck Polkadot. But when comparing it to its historical volatility, VanEck iBoxx EUR is 32.88 times less risky than VanEck Polkadot. It trades about 0.07 of its potential returns per unit of risk. VanEck Polkadot ETN is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 132.00 in VanEck Polkadot ETN on August 31, 2024 and sell it today you would earn a total of 120.00 from holding VanEck Polkadot ETN or generate 90.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck iBoxx EUR vs. VanEck Polkadot ETN
Performance |
| Timeline |
| VanEck iBoxx EUR |
| VanEck Polkadot ETN |
VanEck IBoxx and VanEck Polkadot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck IBoxx and VanEck Polkadot
The main advantage of trading using opposite VanEck IBoxx and VanEck Polkadot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck IBoxx position performs unexpectedly, VanEck Polkadot 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 Polkadot will offset losses from the drop in VanEck Polkadot's long position.| VanEck IBoxx vs. iShares Core MSCI | VanEck IBoxx vs. Vanguard FTSE All World | VanEck IBoxx vs. BlackRock ESG Multi Asset | VanEck IBoxx vs. Pershing Square Holdings |
| VanEck Polkadot vs. VanEck Multi Asset Growth | VanEck Polkadot vs. VanEck AMX UCITS | VanEck Polkadot vs. VanEck iBoxx EUR | VanEck Polkadot vs. VanEck iBoxx EUR |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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