Correlation Between VanEck Digital and DAM

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

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

Diversification Opportunities for VanEck Digital and DAM

0.0

Correlation Coefficient

VanEck Digital  DAM

Pay attention - limited upside

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

Pair Corralation between VanEck Digital and DAM

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

VanEck Digital Transformation  vs.  DAM

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.

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.

Pair Trading with VanEck Digital and DAM

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

The idea behind VanEck Digital Transformation and DAM 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 Global Correlations module to find global opportunities by holding instruments from different markets.