Correlation Between VanEck Vietnam and Global X
Can any of the company-specific risk be diversified away by investing in both VanEck Vietnam and Global X 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 Vietnam and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Vietnam ETF and Global X MSCI, you can compare the effects of market volatilities on VanEck Vietnam and Global X 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 Vietnam with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Vietnam and Global X.
Diversification Opportunities for VanEck Vietnam and Global X
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VanEck and Global is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vietnam ETF and Global X MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X MSCI and VanEck Vietnam 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 Vietnam ETF are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X MSCI has no effect on the direction of VanEck Vietnam i.e., VanEck Vietnam and Global X go up and down completely randomly.
Pair Corralation between VanEck Vietnam and Global X
Considering the 90-day investment horizon VanEck Vietnam ETF is expected to generate 0.95 times more return on investment than Global X. However, VanEck Vietnam ETF is 1.05 times less risky than Global X. It trades about 0.11 of its potential returns per unit of risk. Global X MSCI is currently generating about 0.07 per unit of risk. If you would invest 1,137 in VanEck Vietnam ETF on November 9, 2024 and sell it today you would earn a total of 22.00 from holding VanEck Vietnam ETF or generate 1.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Vietnam ETF vs. Global X MSCI
Performance |
| Timeline |
| VanEck Vietnam ETF |
| Global X MSCI |
VanEck Vietnam and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Vietnam and Global X
The main advantage of trading using opposite VanEck Vietnam and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Vietnam position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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