Correlation Between Stellar and VanEck Global
Can any of the company-specific risk be diversified away by investing in both Stellar and VanEck Global 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 Stellar and VanEck Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellar and VanEck Global Listed, you can compare the effects of market volatilities on Stellar and VanEck Global 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 Stellar with a short position of VanEck Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellar and VanEck Global.
Diversification Opportunities for Stellar and VanEck Global
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stellar and VanEck is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and VanEck Global Listed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Global Listed and Stellar 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 Stellar are associated (or correlated) with VanEck Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Global Listed has no effect on the direction of Stellar i.e., Stellar and VanEck Global go up and down completely randomly.
Pair Corralation between Stellar and VanEck Global
Assuming the 90 days trading horizon Stellar is expected to generate 10.18 times more return on investment than VanEck Global. However, Stellar is 10.18 times more volatile than VanEck Global Listed. It trades about 0.19 of its potential returns per unit of risk. VanEck Global Listed is currently generating about 0.24 per unit of risk. If you would invest 9.16 in Stellar on November 2, 2024 and sell it today you would earn a total of 33.84 from holding Stellar or generate 369.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.2% |
| Values | Daily Returns |
Stellar vs. VanEck Global Listed
Performance |
| Timeline |
| Stellar |
| VanEck Global Listed |
Stellar and VanEck Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellar and VanEck Global
The main advantage of trading using opposite Stellar and VanEck Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar position performs unexpectedly, VanEck Global 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 Global will offset losses from the drop in VanEck Global's long position.The idea behind Stellar and VanEck Global Listed 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 Global vs. BetaShares Crypto Innovators | VanEck Global vs. BetaShares Global Government | VanEck Global vs. BetaShares Geared Australian | VanEck Global vs. Global X Semiconductor |
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 CEOs Directory module to screen CEOs from public companies around the world.
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