Correlation Between VanEck Green and VanEck Vectors

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

Diversification Opportunities for VanEck Green and VanEck Vectors

-0.15

Correlation Coefficient

VanEck Green  VanEck Vectors

Good diversification

The 3 months correlation between VanEck and VanEck is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Green Bond and VanEck Vectors ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Vectors ETF 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 VanEck Vectors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Vectors ETF has no effect on the direction of VanEck Green i.e., VanEck Green and VanEck Vectors go up and down completely randomly.

Pair Corralation between VanEck Green and VanEck Vectors

Given the investment horizon of 90 days VanEck Green Bond is expected to under-perform the VanEck Vectors. But the etf apears to be less risky and, when comparing its historical volatility, VanEck Green Bond is 9.7 times less risky than VanEck Vectors. The etf trades about -0.03 of its potential returns per unit of risk. The VanEck Vectors ETF is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,214  in VanEck Vectors ETF on September 12, 2024 and sell it today you would earn a total of  173.22  from holding VanEck Vectors ETF or generate 7.82% return on investment over 90 days.

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

VanEck Green Bond  vs.  VanEck Vectors ETF

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.

VanEck Vectors ETF

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Vectors ETF are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent technical and fundamental indicators, VanEck Vectors may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with VanEck Green and VanEck Vectors

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

The idea behind VanEck Green Bond and VanEck Vectors ETF 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.