Correlation Between SmartETFs Dividend and VanEck CMCI

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

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

Diversification Opportunities for SmartETFs Dividend and VanEck CMCI

-0.42

Correlation Coefficient

SmartETFs Dividend  VanEck CMCI

Very good diversification

The 3 months correlation between SmartETFs and VanEck is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding SmartETFs Dividend Builder and VanEck CMCI Commodity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck CMCI Commodity and SmartETFs Dividend 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 SmartETFs Dividend Builder are associated (or correlated) with VanEck CMCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck CMCI Commodity has no effect on the direction of SmartETFs Dividend i.e., SmartETFs Dividend and VanEck CMCI go up and down completely randomly.

Pair Corralation between SmartETFs Dividend and VanEck CMCI

Given the investment horizon of 90 days SmartETFs Dividend Builder is expected to under-perform the VanEck CMCI. But the etf apears to be less risky and, when comparing its historical volatility, SmartETFs Dividend Builder is 1.75 times less risky than VanEck CMCI. The etf trades about -0.02 of its potential returns per unit of risk. The VanEck CMCI Commodity is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,432  in VanEck CMCI Commodity on October 24, 2024 and sell it today you would earn a total of  100.00  from holding VanEck CMCI Commodity or generate 4.11% return on investment over 90 days.

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

SmartETFs Dividend Builder  vs.  VanEck CMCI Commodity

SmartETFs Dividend

Risk-Adjusted Performance

0 of 100

Very Weak

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

VanEck CMCI Commodity

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck CMCI Commodity are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, VanEck CMCI is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with SmartETFs Dividend and VanEck CMCI

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

The idea behind SmartETFs Dividend Builder and VanEck CMCI Commodity 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.