Correlation Between VanEck Vectors and VanEck Smart

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

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

Diversification Opportunities for VanEck Vectors and VanEck Smart

-0.06

Correlation Coefficient

VanEck Vectors  VanEck Smart

Good diversification

The 3 months correlation between VanEck and VanEck is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vectors Morningstar and VanEck Smart Contract in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Smart Contract and VanEck Vectors 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 Vectors Morningstar are associated (or correlated) with VanEck Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Smart Contract has no effect on the direction of VanEck Vectors i.e., VanEck Vectors and VanEck Smart go up and down completely randomly.

Pair Corralation between VanEck Vectors and VanEck Smart

Assuming the 90 days trading horizon VanEck Vectors is expected to generate 1.43 times less return on investment than VanEck Smart. But when comparing it to its historical volatility, VanEck Vectors Morningstar is 2.28 times less risky than VanEck Smart. It trades about 0.29 of its potential returns per unit of risk. VanEck Smart Contract is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,129  in VanEck Smart Contract on October 25, 2024 and sell it today you would earn a total of  133.00  from holding VanEck Smart Contract or generate 11.78% return on investment over 90 days.

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

VanEck Vectors Morningstar  vs.  VanEck Smart Contract

VanEck Vectors Morni

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Vectors Morningstar are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, VanEck Vectors may actually be approaching a critical reversion point that can send shares even higher in February 2025.

VanEck Smart Contract

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Smart Contract are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, VanEck Smart exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VanEck Vectors and VanEck Smart

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

The idea behind VanEck Vectors Morningstar and VanEck Smart Contract 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.