Correlation Between DAM and VanEck Digital

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

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

Diversification Opportunities for DAM and VanEck Digital

0.0

Correlation Coefficient

DAM  VanEck Digital

Pay attention - limited upside

The 3 months correlation between DAM and VanEck is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DAM and VanEck Digital Transformation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Digital Trans and DAM 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 DAM are associated (or correlated) with VanEck Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Digital Trans has no effect on the direction of DAM i.e., DAM and VanEck Digital go up and down completely randomly.

Pair Corralation between DAM and VanEck Digital

If you would invest (100.00) in DAM on December 27, 2024 and sell it today you would earn a total of  100.00  from holding DAM or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

DAM  vs.  VanEck Digital Transformation

DAM

Risk-Adjusted Performance

Very Weak

Over the last 90 days DAM has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, DAM is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

VanEck Digital Trans

Risk-Adjusted Performance

Very Weak

Over the last 90 days VanEck Digital Transformation has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Etf's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the ETF retail investors.

Pair Trading with DAM and VanEck Digital

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

The idea behind DAM and VanEck Digital Transformation 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.