Correlation Between VanEck Natural and Barclays Capital

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

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

Diversification Opportunities for VanEck Natural and Barclays Capital

0.45

Correlation Coefficient

VanEck Natural  Barclays Capital

Very weak diversification

The 3 months correlation between VanEck and Barclays is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Natural Resources and Barclays Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays Capital and VanEck Natural 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 Natural Resources are associated (or correlated) with Barclays Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays Capital has no effect on the direction of VanEck Natural i.e., VanEck Natural and Barclays Capital go up and down completely randomly.

Pair Corralation between VanEck Natural and Barclays Capital

Considering the 90-day investment horizon VanEck Natural is expected to generate 1242.83 times less return on investment than Barclays Capital. But when comparing it to its historical volatility, VanEck Natural Resources is 14.26 times less risky than Barclays Capital. It trades about 0.0 of its potential returns per unit of risk. Barclays Capital is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  7,112  in Barclays Capital on October 22, 2024 and sell it today you would lose (426.00) from holding Barclays Capital or give up 5.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	25.2%
Values	Daily Returns

VanEck Natural Resources  vs.  Barclays Capital

VanEck Natural Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck Natural Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, VanEck Natural is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Barclays Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barclays Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Barclays Capital is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with VanEck Natural and Barclays Capital

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

The idea behind VanEck Natural Resources and Barclays Capital 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.