Correlation Between Global X and VanEck Steel
Can any of the company-specific risk be diversified away by investing in both Global X and VanEck Steel 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 Global X and VanEck Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Uranium and VanEck Steel ETF, you can compare the effects of market volatilities on Global X and VanEck Steel 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 Global X with a short position of VanEck Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and VanEck Steel.
Diversification Opportunities for Global X and VanEck Steel
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Global and VanEck is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Global X Uranium and VanEck Steel ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Steel ETF and Global X 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 Global X Uranium are associated (or correlated) with VanEck Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Steel ETF has no effect on the direction of Global X i.e., Global X and VanEck Steel go up and down completely randomly.
Pair Corralation between Global X and VanEck Steel
Considering the 90-day investment horizon Global X Uranium is expected to under-perform the VanEck Steel. In addition to that, Global X is 1.43 times more volatile than VanEck Steel ETF. It trades about -0.04 of its total potential returns per unit of risk. VanEck Steel ETF is currently generating about -0.04 per unit of volatility. If you would invest 6,745 in VanEck Steel ETF on January 11, 2025 and sell it today you would lose (1,065) from holding VanEck Steel ETF or give up 15.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Uranium vs. VanEck Steel ETF
Performance |
| Timeline |
| Global X Uranium |
| VanEck Steel ETF |
Global X and VanEck Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and VanEck Steel
The main advantage of trading using opposite Global X and VanEck Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, VanEck Steel 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 Steel will offset losses from the drop in VanEck Steel's long position.| Global X vs. Sprott Uranium Miners | Global X vs. Uranium Energy Corp | Global X vs. Cameco Corp | Global X vs. Energy Fuels |
| VanEck Steel vs. Mast Global Battery | VanEck Steel vs. Materials Select Sector | VanEck Steel vs. Vanguard Materials Index | VanEck Steel vs. SPDR SP Metals |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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