Correlation Between VanEck Vectors and Global X

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

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

Diversification Opportunities for VanEck Vectors and Global X

0.95

Correlation Coefficient

VanEck Vectors  Global X

Almost no diversification

The 3 months correlation between VanEck and Global is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vectors ETF and Global X Disruptive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Disruptive and VanEck Vectors 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 Vectors ETF are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Disruptive has no effect on the direction of VanEck Vectors i.e., VanEck Vectors and Global X go up and down completely randomly.

Pair Corralation between VanEck Vectors and Global X

Given the investment horizon of 90 days VanEck Vectors ETF is expected to generate 0.93 times more return on investment than Global X. However, VanEck Vectors ETF is 1.07 times less risky than Global X. It trades about -0.03 of its potential returns per unit of risk. Global X Disruptive is currently generating about -0.03 per unit of risk. If you would invest  3,144  in VanEck Vectors ETF on October 21, 2024 and sell it today you would lose (928.00) from holding VanEck Vectors ETF or give up 29.52% of portfolio value over 90 days.

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

VanEck Vectors ETF  vs.  Global X Disruptive

VanEck Vectors ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck Vectors ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Global X Disruptive

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with VanEck Vectors and Global X

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

The idea behind VanEck Vectors ETF and Global X Disruptive 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.