Correlation Between VanEck Green and Global X

Can any of the company-specific risk be diversified away by investing in both VanEck Green 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 Green 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 Green Bond and Global X Disruptive, you can compare the effects of market volatilities on VanEck Green 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 Green with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Green and Global X.

Diversification Opportunities for VanEck Green and Global X

-0.53

Correlation Coefficient

VanEck Green  Global X

Excellent diversification

The 3 months correlation between VanEck and Global is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Green Bond 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 Green 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 Green Bond 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 Green i.e., VanEck Green and Global X go up and down completely randomly.

Pair Corralation between VanEck Green and Global X

Given the investment horizon of 90 days VanEck Green Bond is expected to generate 0.13 times more return on investment than Global X. However, VanEck Green Bond is 7.72 times less risky than Global X. It trades about 0.09 of its potential returns per unit of risk. Global X Disruptive is currently generating about -0.07 per unit of risk. If you would invest  2,397  in VanEck Green Bond on September 4, 2024 and sell it today you would earn a total of  13.00  from holding VanEck Green Bond or generate 0.54% return on investment over 90 days.

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

VanEck Green Bond  vs.  Global X Disruptive

VanEck Green Bond

Risk-Adjusted Performance

0 of 100

Very Weak

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

Global X Disruptive

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Disruptive are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Global X unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VanEck Green and Global X

The main advantage of trading using opposite VanEck Green and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Green 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 Green Bond 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.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..