Correlation Between IShares Treasury and VanEck ETF
Can any of the company-specific risk be diversified away by investing in both IShares Treasury and VanEck ETF 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 IShares Treasury and VanEck ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Treasury Floating and VanEck ETF Trust, you can compare the effects of market volatilities on IShares Treasury and VanEck ETF 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 IShares Treasury with a short position of VanEck ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Treasury and VanEck ETF.
Diversification Opportunities for IShares Treasury and VanEck ETF
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and VanEck is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares Treasury Floating and VanEck ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck ETF Trust and IShares Treasury 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 iShares Treasury Floating are associated (or correlated) with VanEck ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck ETF Trust has no effect on the direction of IShares Treasury i.e., IShares Treasury and VanEck ETF go up and down completely randomly.
Pair Corralation between IShares Treasury and VanEck ETF
Given the investment horizon of 90 days IShares Treasury is expected to generate 1.72 times less return on investment than VanEck ETF. But when comparing it to its historical volatility, iShares Treasury Floating is 2.18 times less risky than VanEck ETF. It trades about 0.55 of its potential returns per unit of risk. VanEck ETF Trust is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 5,287 in VanEck ETF Trust on November 5, 2024 and sell it today you would earn a total of 27.00 from holding VanEck ETF Trust or generate 0.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Treasury Floating vs. VanEck ETF Trust
Performance |
| Timeline |
| iShares Treasury Floating |
| VanEck ETF Trust |
IShares Treasury and VanEck ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Treasury and VanEck ETF
The main advantage of trading using opposite IShares Treasury and VanEck ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Treasury position performs unexpectedly, VanEck ETF 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 ETF will offset losses from the drop in VanEck ETF's long position.| IShares Treasury vs. SPDR Bloomberg 1 3 | IShares Treasury vs. iShares Short Treasury | IShares Treasury vs. JPMorgan Ultra Short Income | IShares Treasury vs. WisdomTree Floating Rate |
| VanEck ETF vs. Janus Detroit Street | VanEck ETF vs. Janus Detroit Street | VanEck ETF vs. BlackRock AAA CLO | VanEck ETF vs. VanEck Investment Grade |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |