Correlation Between VanEck Crypto and Legal General

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

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

Diversification Opportunities for VanEck Crypto and Legal General

0.96

Correlation Coefficient

VanEck Crypto  Legal General

Almost no diversification

The 3 months correlation between VanEck and Legal is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Crypto and and Legal General UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legal General UCITS and VanEck Crypto 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 Crypto and are associated (or correlated) with Legal General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legal General UCITS has no effect on the direction of VanEck Crypto i.e., VanEck Crypto and Legal General go up and down completely randomly.

Pair Corralation between VanEck Crypto and Legal General

Assuming the 90 days trading horizon VanEck Crypto and is expected to generate 3.04 times more return on investment than Legal General. However, VanEck Crypto is 3.04 times more volatile than Legal General UCITS. It trades about 0.1 of its potential returns per unit of risk. Legal General UCITS is currently generating about 0.14 per unit of risk. If you would invest  1,137  in VanEck Crypto and on September 17, 2024 and sell it today you would earn a total of  64.00  from holding VanEck Crypto and or generate 5.63% return on investment over 90 days.

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

VanEck Crypto and  vs.  Legal General UCITS

VanEck Crypto

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Crypto and are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, VanEck Crypto reported solid returns over the last few months and may actually be approaching a breakup point.

Legal General UCITS

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Legal General UCITS are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Legal General reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VanEck Crypto and Legal General

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

The idea behind VanEck Crypto and and Legal General UCITS 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.