Correlation Between IQ Healthy and VanEck Energy

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

By analyzing existing cross correlation between IQ Healthy Hearts and VanEck Energy Income, you can compare the effects of market volatilities on IQ Healthy and VanEck Energy 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 IQ Healthy with a short position of VanEck Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQ Healthy and VanEck Energy.

Diversification Opportunities for IQ Healthy and VanEck Energy

0.1

Correlation Coefficient

IQ Healthy  VanEck Energy

Average diversification

The 3 months correlation between HART and VanEck is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding IQ Healthy Hearts and VanEck Energy Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Energy Income and IQ Healthy 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 IQ Healthy Hearts are associated (or correlated) with VanEck Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Energy Income has no effect on the direction of IQ Healthy i.e., IQ Healthy and VanEck Energy go up and down completely randomly.

Pair Corralation between IQ Healthy and VanEck Energy

Given the investment horizon of 90 days IQ Healthy is expected to generate 6.27 times less return on investment than VanEck Energy. But when comparing it to its historical volatility, IQ Healthy Hearts is 1.85 times less risky than VanEck Energy. It trades about 0.03 of its potential returns per unit of risk. VanEck Energy Income is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  9,248  in VanEck Energy Income on December 27, 2024 and sell it today you would earn a total of  757.00  from holding VanEck Energy Income or generate 8.19% return on investment over 90 days.

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

IQ Healthy Hearts  vs.  VanEck Energy Income

IQ Healthy Hearts

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in IQ Healthy Hearts are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, IQ Healthy is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

VanEck Energy Income

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Energy Income are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, VanEck Energy may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with IQ Healthy and VanEck Energy

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

The idea behind IQ Healthy Hearts and VanEck Energy Income 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.