Correlation Between VanEck JP and AEMB

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

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

Diversification Opportunities for VanEck JP and AEMB

0.0

Correlation Coefficient

VanEck JP  AEMB

Pay attention - limited upside

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

Pair Corralation between VanEck JP and AEMB

If you would invest  2,295  in VanEck JP Morgan on December 28, 2024 and sell it today you would earn a total of  89.00  from holding VanEck JP Morgan or generate 3.88% return on investment over 90 days.

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

VanEck JP Morgan  vs.  AEMB

VanEck JP Morgan

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck JP Morgan are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, VanEck JP is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

AEMB

Risk-Adjusted Performance

Very Weak

Over the last 90 days AEMB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, AEMB is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with VanEck JP and AEMB

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

The idea behind VanEck JP Morgan and AEMB 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.