Correlation Between Global X and VanEck Vietnam
Can any of the company-specific risk be diversified away by investing in both Global X and VanEck Vietnam 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 Vietnam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X MSCI and VanEck Vietnam ETF, you can compare the effects of market volatilities on Global X and VanEck Vietnam 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 Vietnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and VanEck Vietnam.
Diversification Opportunities for Global X and VanEck Vietnam
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Global and VanEck is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Global X MSCI and VanEck Vietnam ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Vietnam 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 MSCI are associated (or correlated) with VanEck Vietnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Vietnam ETF has no effect on the direction of Global X i.e., Global X and VanEck Vietnam go up and down completely randomly.
Pair Corralation between Global X and VanEck Vietnam
Given the investment horizon of 90 days Global X MSCI is expected to generate 0.94 times more return on investment than VanEck Vietnam. However, Global X MSCI is 1.06 times less risky than VanEck Vietnam. It trades about 0.01 of its potential returns per unit of risk. VanEck Vietnam ETF is currently generating about 0.01 per unit of risk. If you would invest 1,543 in Global X MSCI on September 2, 2024 and sell it today you would earn a total of 10.00 from holding Global X MSCI or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X MSCI vs. VanEck Vietnam ETF
Performance |
| Timeline |
| Global X MSCI |
| VanEck Vietnam ETF |
Global X and VanEck Vietnam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and VanEck Vietnam
The main advantage of trading using opposite Global X and VanEck Vietnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, VanEck Vietnam 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 Vietnam will offset losses from the drop in VanEck Vietnam's long position.The idea behind Global X MSCI and VanEck Vietnam ETF 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.| VanEck Vietnam vs. iShares MSCI Thailand | VanEck Vietnam vs. iShares MSCI Indonesia | VanEck Vietnam vs. iShares MSCI Turkey | VanEck Vietnam vs. iShares MSCI Philippines |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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