Correlation Between VanEck Global and VanEck 1

Can any of the company-specific risk be diversified away by investing in both VanEck Global and VanEck 1 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 Global and VanEck 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VanEck Global Clean and VanEck 1 5 Year, you can compare the effects of market volatilities on VanEck Global and VanEck 1 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 Global with a short position of VanEck 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Global and VanEck 1.

Diversification Opportunities for VanEck Global and VanEck 1

0.03

Correlation Coefficient

VanEck Global  VanEck 1

Significant diversification

The 3 months correlation between VanEck and VanEck is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Global Clean and VanEck 1 5 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck 1 5 and VanEck Global 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 Global Clean are associated (or correlated) with VanEck 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck 1 5 has no effect on the direction of VanEck Global i.e., VanEck Global and VanEck 1 go up and down completely randomly.

Pair Corralation between VanEck Global and VanEck 1

Assuming the 90 days trading horizon VanEck Global Clean is expected to under-perform the VanEck 1. In addition to that, VanEck Global is 8.2 times more volatile than VanEck 1 5 Year. It trades about -0.01 of its total potential returns per unit of risk. VanEck 1 5 Year is currently generating about 0.13 per unit of volatility. If you would invest  5,082  in VanEck 1 5 Year on December 30, 2024 and sell it today you would earn a total of  61.00  from holding VanEck 1 5 Year or generate 1.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	92.19%
Values	Daily Returns

VanEck Global Clean  vs.  VanEck 1 5 Year

VanEck Global Clean

Risk-Adjusted Performance

Very Weak

Over the last 90 days VanEck Global Clean has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, VanEck Global is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

VanEck 1 5

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck 1 5 Year are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, VanEck 1 is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with VanEck Global and VanEck 1

The main advantage of trading using opposite VanEck Global and VanEck 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Global position performs unexpectedly, VanEck 1 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 1 will offset losses from the drop in VanEck 1's long position.

The idea behind VanEck Global Clean and VanEck 1 5 Year 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.