Correlation Between VanEck IBoxx and VanEck Gold
Can any of the company-specific risk be diversified away by investing in both VanEck IBoxx and VanEck Gold 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 Gold 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 Gold Miners, you can compare the effects of market volatilities on VanEck IBoxx and VanEck Gold 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 Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck IBoxx and VanEck Gold.
Diversification Opportunities for VanEck IBoxx and VanEck Gold
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between VanEck and VanEck is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding VanEck iBoxx EUR and VanEck Gold Miners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Gold Miners 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 Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Gold Miners has no effect on the direction of VanEck IBoxx i.e., VanEck IBoxx and VanEck Gold go up and down completely randomly.
Pair Corralation between VanEck IBoxx and VanEck Gold
Assuming the 90 days trading horizon VanEck IBoxx is expected to generate 37.03 times less return on investment than VanEck Gold. But when comparing it to its historical volatility, VanEck iBoxx EUR is 2.49 times less risky than VanEck Gold. It trades about 0.0 of its potential returns per unit of risk. VanEck Gold Miners is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,753 in VanEck Gold Miners on September 14, 2024 and sell it today you would earn a total of 997.00 from holding VanEck Gold Miners or generate 36.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.53% |
| Values | Daily Returns |
VanEck iBoxx EUR vs. VanEck Gold Miners
Performance |
| Timeline |
| VanEck iBoxx EUR |
| VanEck Gold Miners |
VanEck IBoxx and VanEck Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck IBoxx and VanEck Gold
The main advantage of trading using opposite VanEck IBoxx and VanEck Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck IBoxx position performs unexpectedly, VanEck Gold 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 Gold will offset losses from the drop in VanEck Gold's long position.| VanEck IBoxx vs. VanEck Solana ETN | VanEck IBoxx vs. VanEck Sustainable World | VanEck IBoxx vs. VanEck Global Fallen | VanEck IBoxx vs. VanEck Oil Services |
| VanEck Gold vs. VanEck Solana ETN | VanEck Gold vs. VanEck Sustainable World | VanEck Gold vs. VanEck iBoxx EUR | VanEck Gold vs. VanEck Global Fallen |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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