Correlation Between VanEck AEX and VanEck IBoxx
Can any of the company-specific risk be diversified away by investing in both VanEck AEX and VanEck IBoxx 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 AEX and VanEck IBoxx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck AEX UCITS and VanEck iBoxx EUR, you can compare the effects of market volatilities on VanEck AEX and VanEck IBoxx 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 AEX with a short position of VanEck IBoxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck AEX and VanEck IBoxx.
Diversification Opportunities for VanEck AEX and VanEck IBoxx
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VanEck and VanEck is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding VanEck AEX UCITS and VanEck iBoxx EUR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck iBoxx EUR and VanEck AEX 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 AEX UCITS are associated (or correlated) with VanEck IBoxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck iBoxx EUR has no effect on the direction of VanEck AEX i.e., VanEck AEX and VanEck IBoxx go up and down completely randomly.
Pair Corralation between VanEck AEX and VanEck IBoxx
Assuming the 90 days trading horizon VanEck AEX UCITS is expected to generate 2.78 times more return on investment than VanEck IBoxx. However, VanEck AEX is 2.78 times more volatile than VanEck iBoxx EUR. It trades about 0.07 of its potential returns per unit of risk. VanEck iBoxx EUR is currently generating about 0.1 per unit of risk. If you would invest 7,402 in VanEck AEX UCITS on August 31, 2024 and sell it today you would earn a total of 1,487 from holding VanEck AEX UCITS or generate 20.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck AEX UCITS vs. VanEck iBoxx EUR
Performance |
| Timeline |
| VanEck AEX UCITS |
| VanEck iBoxx EUR |
VanEck AEX and VanEck IBoxx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck AEX and VanEck IBoxx
The main advantage of trading using opposite VanEck AEX and VanEck IBoxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck AEX position performs unexpectedly, VanEck IBoxx 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 IBoxx will offset losses from the drop in VanEck IBoxx's long position.| VanEck AEX vs. iShares Core MSCI | VanEck AEX vs. BlackRock ESG Multi Asset | VanEck AEX vs. Pershing Square Holdings | VanEck AEX vs. ASML Holding NV |
| VanEck IBoxx vs. VanEck iBoxx EUR | VanEck IBoxx vs. VanEck Global Real | VanEck IBoxx vs. VanEck AEX UCITS | VanEck IBoxx 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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