Correlation Between Leverage Shares and VanEck IBoxx
Can any of the company-specific risk be diversified away by investing in both Leverage Shares and VanEck IBoxx 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 Leverage Shares and VanEck IBoxx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leverage Shares 2x and VanEck iBoxx EUR, you can compare the effects of market volatilities on Leverage Shares and VanEck IBoxx 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 Leverage Shares with a short position of VanEck IBoxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leverage Shares and VanEck IBoxx.
Diversification Opportunities for Leverage Shares and VanEck IBoxx
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Leverage and VanEck is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 2x and VanEck iBoxx EUR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck iBoxx EUR and Leverage Shares 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 Leverage Shares 2x are associated (or correlated) with VanEck IBoxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck iBoxx EUR has no effect on the direction of Leverage Shares i.e., Leverage Shares and VanEck IBoxx go up and down completely randomly.
Pair Corralation between Leverage Shares and VanEck IBoxx
Assuming the 90 days trading horizon Leverage Shares 2x is expected to under-perform the VanEck IBoxx. In addition to that, Leverage Shares is 9.24 times more volatile than VanEck iBoxx EUR. It trades about -0.13 of its total potential returns per unit of risk. VanEck iBoxx EUR is currently generating about 0.02 per unit of volatility. If you would invest 1,889 in VanEck iBoxx EUR on December 30, 2024 and sell it today you would earn a total of 8.00 from holding VanEck iBoxx EUR or generate 0.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Leverage Shares 2x vs. VanEck iBoxx EUR
Performance |
Timeline |
Leverage Shares 2x |
VanEck iBoxx EUR |
Leverage Shares and VanEck IBoxx Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Leverage Shares and VanEck IBoxx
The main advantage of trading using opposite Leverage Shares and VanEck IBoxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leverage Shares position performs unexpectedly, VanEck IBoxx 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 IBoxx will offset losses from the drop in VanEck IBoxx's long position.Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x |
VanEck IBoxx vs. VanEck iBoxx EUR | VanEck IBoxx vs. VanEck AEX UCITS | VanEck IBoxx vs. VanEck iBoxx EUR | VanEck IBoxx vs. iShares EURO STOXX |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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