Correlation Between SPDR Series and Vaneck Vectors
Can any of the company-specific risk be diversified away by investing in both SPDR Series 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 SPDR Series and Vaneck Vectors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Series Trust and Vaneck Vectors Emerging, you can compare the effects of market volatilities on SPDR Series 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 SPDR Series with a short position of Vaneck Vectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Series and Vaneck Vectors.
Diversification Opportunities for SPDR Series and Vaneck Vectors
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and Vaneck is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Series Trust and Vaneck Vectors Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaneck Vectors Emerging and SPDR Series 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 SPDR Series Trust 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 Emerging has no effect on the direction of SPDR Series i.e., SPDR Series and Vaneck Vectors go up and down completely randomly.
Pair Corralation between SPDR Series and Vaneck Vectors
Assuming the 90 days trading horizon SPDR Series Trust is expected to under-perform the Vaneck Vectors. In addition to that, SPDR Series is 14.64 times more volatile than Vaneck Vectors Emerging. It trades about -0.12 of its total potential returns per unit of risk. Vaneck Vectors Emerging is currently generating about 0.22 per unit of volatility. If you would invest 38,614 in Vaneck Vectors Emerging on September 13, 2024 and sell it today you would earn a total of 212.00 from holding Vaneck Vectors Emerging or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Series Trust vs. Vaneck Vectors Emerging
Performance |
| Timeline |
| SPDR Series Trust |
| Vaneck Vectors Emerging |
SPDR Series and Vaneck Vectors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Series and Vaneck Vectors
The main advantage of trading using opposite SPDR Series and Vaneck Vectors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Series 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.| SPDR Series vs. Vanguard Index Funds | SPDR Series vs. Vanguard Index Funds | SPDR Series vs. Vanguard STAR Funds | SPDR Series vs. SPDR SP 500 |
| Vaneck Vectors vs. Vaneck Vectors Semiconductor | Vaneck Vectors vs. Vaneck Vectors Investment | Vaneck Vectors vs. Vaneck Vectors Amt free | Vaneck Vectors vs. iShares Trust |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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