Correlation Between VanEck Gaming and AdvisorShares Pure

Can any of the company-specific risk be diversified away by investing in both VanEck Gaming and AdvisorShares Pure 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 Gaming and AdvisorShares Pure into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VanEck Gaming ETF and AdvisorShares Pure Cannabis, you can compare the effects of market volatilities on VanEck Gaming and AdvisorShares Pure 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 Gaming with a short position of AdvisorShares Pure. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Gaming and AdvisorShares Pure.

Diversification Opportunities for VanEck Gaming and AdvisorShares Pure

0.3

Correlation Coefficient

VanEck Gaming  AdvisorShares Pure

Weak diversification

The 3 months correlation between VanEck and AdvisorShares is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Gaming ETF and AdvisorShares Pure Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares Pure and VanEck Gaming 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 Gaming ETF are associated (or correlated) with AdvisorShares Pure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares Pure has no effect on the direction of VanEck Gaming i.e., VanEck Gaming and AdvisorShares Pure go up and down completely randomly.

Pair Corralation between VanEck Gaming and AdvisorShares Pure

Considering the 90-day investment horizon VanEck Gaming ETF is expected to generate 0.2 times more return on investment than AdvisorShares Pure. However, VanEck Gaming ETF is 4.99 times less risky than AdvisorShares Pure. It trades about -0.18 of its potential returns per unit of risk. AdvisorShares Pure Cannabis is currently generating about -0.04 per unit of risk. If you would invest  4,298  in VanEck Gaming ETF on October 10, 2024 and sell it today you would lose (291.00) from holding VanEck Gaming ETF or give up 6.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

VanEck Gaming ETF  vs.  AdvisorShares Pure Cannabis

VanEck Gaming ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck Gaming ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest sluggish performance, the Etf's forward-looking indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the ETF venture institutional investors.

AdvisorShares Pure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AdvisorShares Pure Cannabis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Pair Trading with VanEck Gaming and AdvisorShares Pure

The main advantage of trading using opposite VanEck Gaming and AdvisorShares Pure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Gaming position performs unexpectedly, AdvisorShares Pure 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 AdvisorShares Pure will offset losses from the drop in AdvisorShares Pure's long position.

The idea behind VanEck Gaming ETF and AdvisorShares Pure Cannabis 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.