Correlation Between United States and VanEck High
Can any of the company-specific risk be diversified away by investing in both United States and VanEck High 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 United States and VanEck High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Oil and VanEck High Yield, you can compare the effects of market volatilities on United States and VanEck High 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 United States with a short position of VanEck High. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and VanEck High.
Diversification Opportunities for United States and VanEck High
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and VanEck is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding United States Oil and VanEck High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck High Yield and United States 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 United States Oil are associated (or correlated) with VanEck High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck High Yield has no effect on the direction of United States i.e., United States and VanEck High go up and down completely randomly.
Pair Corralation between United States and VanEck High
Considering the 90-day investment horizon United States Oil is expected to generate 6.6 times more return on investment than VanEck High. However, United States is 6.6 times more volatile than VanEck High Yield. It trades about 0.05 of its potential returns per unit of risk. VanEck High Yield is currently generating about 0.06 per unit of risk. If you would invest 7,693 in United States Oil on November 3, 2024 and sell it today you would earn a total of 109.00 from holding United States Oil or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
United States Oil vs. VanEck High Yield
Performance |
| Timeline |
| United States Oil |
| VanEck High Yield |
United States and VanEck High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and VanEck High
The main advantage of trading using opposite United States and VanEck High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, VanEck High 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 High will offset losses from the drop in VanEck High's long position.| United States vs. United States Natural | United States vs. SPDR Gold Shares | United States vs. ProShares Ultra Bloomberg | United States vs. Energy Select Sector |
| VanEck High vs. SPDR Nuveen Bloomberg | VanEck High vs. iShares National Muni | VanEck High vs. Invesco National AMT Free | VanEck High vs. VanEck Intermediate Muni |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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