Correlation Between VanEck Solana and VanEck Vectors

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Can any of the company-specific risk be diversified away by investing in both VanEck Solana and VanEck Vectors 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 Solana and VanEck Vectors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Solana ETN and VanEck Vectors Ethereum, you can compare the effects of market volatilities on VanEck Solana and VanEck Vectors 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 Solana with a short position of VanEck Vectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Solana and VanEck Vectors.

Diversification Opportunities for VanEck Solana and VanEck Vectors

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between VanEck and VanEck is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Solana ETN and VanEck Vectors Ethereum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Vectors Ethereum and VanEck Solana 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 Solana ETN are associated (or correlated) with VanEck Vectors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Vectors Ethereum has no effect on the direction of VanEck Solana i.e., VanEck Solana and VanEck Vectors go up and down completely randomly.

Pair Corralation between VanEck Solana and VanEck Vectors

Assuming the 90 days trading horizon VanEck Solana ETN is expected to generate 1.44 times more return on investment than VanEck Vectors. However, VanEck Solana is 1.44 times more volatile than VanEck Vectors Ethereum. It trades about 0.09 of its potential returns per unit of risk. VanEck Vectors Ethereum is currently generating about 0.0 per unit of risk. If you would invest  827.00  in VanEck Solana ETN on August 29, 2024 and sell it today you would earn a total of  485.00  from holding VanEck Solana ETN or generate 58.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy93.7%
ValuesDaily Returns

VanEck Solana ETN  vs.  VanEck Vectors Ethereum

 Performance 
       Timeline  
VanEck Solana ETN 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Solana ETN are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, VanEck Solana sustained solid returns over the last few months and may actually be approaching a breakup point.
VanEck Vectors Ethereum 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Vectors Ethereum are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, VanEck Vectors sustained solid returns over the last few months and may actually be approaching a breakup point.

VanEck Solana and VanEck Vectors Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with VanEck Solana and VanEck Vectors

The main advantage of trading using opposite VanEck Solana and VanEck Vectors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Solana position performs unexpectedly, VanEck Vectors 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 Vectors will offset losses from the drop in VanEck Vectors' long position.
The idea behind VanEck Solana ETN and VanEck Vectors Ethereum 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.
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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