Correlation Between VanEck Intermediate and Trust For

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

By analyzing existing cross correlation between VanEck Intermediate Muni and Trust For Professional, you can compare the effects of market volatilities on VanEck Intermediate and Trust For 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 Intermediate with a short position of Trust For. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Intermediate and Trust For.

Diversification Opportunities for VanEck Intermediate and Trust For

0.84

Correlation Coefficient

VanEck Intermediate  Trust For

Very poor diversification

The 3 months correlation between VanEck and Trust is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Intermediate Muni and Trust For Professional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trust For Professional and VanEck Intermediate 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 Intermediate Muni are associated (or correlated) with Trust For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trust For Professional has no effect on the direction of VanEck Intermediate i.e., VanEck Intermediate and Trust For go up and down completely randomly.

Pair Corralation between VanEck Intermediate and Trust For

Considering the 90-day investment horizon VanEck Intermediate Muni is expected to under-perform the Trust For. In addition to that, VanEck Intermediate is 1.81 times more volatile than Trust For Professional. It trades about -0.09 of its total potential returns per unit of risk. Trust For Professional is currently generating about 0.04 per unit of volatility. If you would invest  2,457  in Trust For Professional on December 28, 2024 and sell it today you would earn a total of  7.00  from holding Trust For Professional or generate 0.28% return on investment over 90 days.

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

VanEck Intermediate Muni  vs.  Trust For Professional

VanEck Intermediate Muni

Risk-Adjusted Performance

Very Weak

Over the last 90 days VanEck Intermediate Muni has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, VanEck Intermediate is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Trust For Professional

Risk-Adjusted Performance

Weak

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

Pair Trading with VanEck Intermediate and Trust For

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

The idea behind VanEck Intermediate Muni and Trust For Professional 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.