Correlation Between VanEck Vectors and YUMY

Can any of the company-specific risk be diversified away by investing in both VanEck Vectors and YUMY 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 YUMY 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 YUMY, you can compare the effects of market volatilities on VanEck Vectors and YUMY 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 YUMY. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Vectors and YUMY.

Diversification Opportunities for VanEck Vectors and YUMY

0.31

Correlation Coefficient

VanEck Vectors  YUMY

Weak diversification

The 3 months correlation between VanEck and YUMY is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vectors ETF and YUMY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YUMY 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 YUMY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YUMY has no effect on the direction of VanEck Vectors i.e., VanEck Vectors and YUMY go up and down completely randomly.

Pair Corralation between VanEck Vectors and YUMY

Given the investment horizon of 90 days VanEck Vectors ETF is expected to under-perform the YUMY. In addition to that, VanEck Vectors is 1.8 times more volatile than YUMY. It trades about -0.04 of its total potential returns per unit of risk. YUMY is currently generating about -0.05 per unit of volatility. If you would invest  1,909  in YUMY on October 12, 2024 and sell it today you would lose (131.00) from holding YUMY or give up 6.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	25.6%
Values	Daily Returns

VanEck Vectors ETF  vs.  YUMY

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 weak performance in the last few months, the Etf's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

YUMY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days YUMY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, YUMY 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 Vectors and YUMY

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

The idea behind VanEck Vectors ETF and YUMY 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.