Correlation Between Mast Global and VanEck Natural

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

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

Diversification Opportunities for Mast Global and VanEck Natural

0.65

Correlation Coefficient

Mast Global  VanEck Natural

Poor diversification

The 3 months correlation between Mast and VanEck is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Mast Global Battery and VanEck Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Natural Resources and Mast Global 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 Mast Global Battery are associated (or correlated) with VanEck Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Natural Resources has no effect on the direction of Mast Global i.e., Mast Global and VanEck Natural go up and down completely randomly.

Pair Corralation between Mast Global and VanEck Natural

Allowing for the 90-day total investment horizon Mast Global Battery is expected to generate 1.32 times more return on investment than VanEck Natural. However, Mast Global is 1.32 times more volatile than VanEck Natural Resources. It trades about -0.14 of its potential returns per unit of risk. VanEck Natural Resources is currently generating about -0.34 per unit of risk. If you would invest  2,456  in Mast Global Battery on October 5, 2024 and sell it today you would lose (96.00) from holding Mast Global Battery or give up 3.91% of portfolio value over 90 days.

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

Mast Global Battery  vs.  VanEck Natural Resources

Mast Global Battery

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mast Global Battery has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Etf's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the fund sophisticated investors.

VanEck Natural Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck Natural Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Etf's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

Pair Trading with Mast Global and VanEck Natural

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

The idea behind Mast Global Battery and VanEck Natural Resources 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.