Correlation Between VanEck Polkadot and VanEck IBoxx
Can any of the company-specific risk be diversified away by investing in both VanEck Polkadot and VanEck IBoxx 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 Polkadot and VanEck IBoxx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Polkadot ETN and VanEck iBoxx EUR, you can compare the effects of market volatilities on VanEck Polkadot and VanEck IBoxx 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 Polkadot with a short position of VanEck IBoxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Polkadot and VanEck IBoxx.
Diversification Opportunities for VanEck Polkadot and VanEck IBoxx
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VanEck and VanEck is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Polkadot ETN and VanEck iBoxx EUR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck iBoxx EUR and VanEck Polkadot 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 Polkadot ETN are associated (or correlated) with VanEck IBoxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck iBoxx EUR has no effect on the direction of VanEck Polkadot i.e., VanEck Polkadot and VanEck IBoxx go up and down completely randomly.
Pair Corralation between VanEck Polkadot and VanEck IBoxx
Assuming the 90 days trading horizon VanEck Polkadot ETN is expected to generate 43.17 times more return on investment than VanEck IBoxx. However, VanEck Polkadot is 43.17 times more volatile than VanEck iBoxx EUR. It trades about 0.4 of its potential returns per unit of risk. VanEck iBoxx EUR is currently generating about 0.14 per unit of risk. If you would invest 118.00 in VanEck Polkadot ETN on September 5, 2024 and sell it today you would earn a total of 183.00 from holding VanEck Polkadot ETN or generate 155.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Polkadot ETN vs. VanEck iBoxx EUR
Performance |
| Timeline |
| VanEck Polkadot ETN |
| VanEck iBoxx EUR |
VanEck Polkadot and VanEck IBoxx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Polkadot and VanEck IBoxx
The main advantage of trading using opposite VanEck Polkadot and VanEck IBoxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Polkadot position performs unexpectedly, VanEck IBoxx 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 IBoxx will offset losses from the drop in VanEck IBoxx's long position.| VanEck Polkadot vs. Vanguard SP 500 | VanEck Polkadot vs. SPDR Dow Jones | VanEck Polkadot vs. iShares Core MSCI | VanEck Polkadot vs. iShares SP 500 |
| VanEck IBoxx vs. HSBC MSCI Japan | VanEck IBoxx vs. iShares II Public | VanEck IBoxx vs. Hydratec Industries NV | VanEck IBoxx vs. VanEck Polkadot ETN |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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