Correlation Between VanEck CEF and MAAX
Can any of the company-specific risk be diversified away by investing in both VanEck CEF and MAAX 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 CEF and MAAX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck CEF Municipal and MAAX, you can compare the effects of market volatilities on VanEck CEF and MAAX 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 CEF with a short position of MAAX. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck CEF and MAAX.
Diversification Opportunities for VanEck CEF and MAAX
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VanEck and MAAX is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding VanEck CEF Municipal and MAAX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAAX and VanEck CEF 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 CEF Municipal are associated (or correlated) with MAAX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAAX has no effect on the direction of VanEck CEF i.e., VanEck CEF and MAAX go up and down completely randomly.
Pair Corralation between VanEck CEF and MAAX
If you would invest 1,945 in VanEck CEF Municipal on August 26, 2024 and sell it today you would earn a total of 292.00 from holding VanEck CEF Municipal or generate 15.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
VanEck CEF Municipal vs. MAAX
Performance |
| Timeline |
| VanEck CEF Municipal |
| MAAX |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
VanEck CEF and MAAX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck CEF and MAAX
The main advantage of trading using opposite VanEck CEF and MAAX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck CEF position performs unexpectedly, MAAX 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 MAAX will offset losses from the drop in MAAX's long position.The idea behind VanEck CEF Municipal and MAAX 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.| MAAX vs. VanEck Short High | MAAX vs. VanEck Long Muni | MAAX vs. VanEck CEF Municipal | MAAX vs. First Trust Municipal |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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