Correlation Between IShares 20 and VanEck International

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Can any of the company-specific risk be diversified away by investing in both IShares 20 and VanEck International 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 20 and VanEck International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares 20 Year and VanEck International High, you can compare the effects of market volatilities on IShares 20 and VanEck International 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 20 with a short position of VanEck International. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares 20 and VanEck International.

Diversification Opportunities for IShares 20 and VanEck International

0.59
  Correlation Coefficient

Very weak diversification

The 3 months correlation between IShares and VanEck is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding iShares 20 Year and VanEck International High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck International High and IShares 20 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 20 Year are associated (or correlated) with VanEck International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck International High has no effect on the direction of IShares 20 i.e., IShares 20 and VanEck International go up and down completely randomly.

Pair Corralation between IShares 20 and VanEck International

Considering the 90-day investment horizon iShares 20 Year is expected to under-perform the VanEck International. In addition to that, IShares 20 is 2.6 times more volatile than VanEck International High. It trades about -0.01 of its total potential returns per unit of risk. VanEck International High is currently generating about 0.08 per unit of volatility. If you would invest  1,957  in VanEck International High on September 13, 2024 and sell it today you would earn a total of  129.00  from holding VanEck International High or generate 6.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

iShares 20 Year  vs.  VanEck International High

 Performance 
       Timeline  
iShares 20 Year 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days iShares 20 Year has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Etf's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.
VanEck International High 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days VanEck International High has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, VanEck International is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

IShares 20 and VanEck International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IShares 20 and VanEck International

The main advantage of trading using opposite IShares 20 and VanEck International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 20 position performs unexpectedly, VanEck International 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 International will offset losses from the drop in VanEck International's long position.
The idea behind iShares 20 Year and VanEck International High pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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