Correlation Between VanEck Investment and SPDR Bloomberg

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

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

Diversification Opportunities for VanEck Investment and SPDR Bloomberg

0.99

Correlation Coefficient

VanEck Investment  SPDR Bloomberg

No risk reduction

The 3 months correlation between VanEck and SPDR is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Investment Grade and SPDR Bloomberg Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Bloomberg Investment and VanEck Investment 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 Investment Grade are associated (or correlated) with SPDR Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Bloomberg Investment has no effect on the direction of VanEck Investment i.e., VanEck Investment and SPDR Bloomberg go up and down completely randomly.

Pair Corralation between VanEck Investment and SPDR Bloomberg

Given the investment horizon of 90 days VanEck Investment Grade is expected to generate 1.27 times more return on investment than SPDR Bloomberg. However, VanEck Investment is 1.27 times more volatile than SPDR Bloomberg Investment. It trades about 0.41 of its potential returns per unit of risk. SPDR Bloomberg Investment is currently generating about 0.4 per unit of risk. If you would invest  2,540  in VanEck Investment Grade on September 3, 2024 and sell it today you would earn a total of  12.00  from holding VanEck Investment Grade or generate 0.47% return on investment over 90 days.

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

VanEck Investment Grade  vs.  SPDR Bloomberg Investment

VanEck Investment Grade

Risk-Adjusted Performance

41 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Investment Grade are ranked lower than 41 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, VanEck Investment is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

SPDR Bloomberg Investment

Risk-Adjusted Performance

34 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Bloomberg Investment are ranked lower than 34 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, SPDR Bloomberg is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with VanEck Investment and SPDR Bloomberg

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

The idea behind VanEck Investment Grade and SPDR Bloomberg Investment 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.