Correlation Between VanEck Vectors and Xtrackers

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

Diversification Opportunities for VanEck Vectors and Xtrackers

0.17

Correlation Coefficient

VanEck Vectors  Xtrackers

Average diversification

The 3 months correlation between VanEck and Xtrackers is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vectors Morningstar and Xtrackers II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers II 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 Xtrackers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers II has no effect on the direction of VanEck Vectors i.e., VanEck Vectors and Xtrackers go up and down completely randomly.

Pair Corralation between VanEck Vectors and Xtrackers

Assuming the 90 days trading horizon VanEck Vectors Morningstar is expected to generate 1.68 times more return on investment than Xtrackers. However, VanEck Vectors is 1.68 times more volatile than Xtrackers II . It trades about 0.02 of its potential returns per unit of risk. Xtrackers II is currently generating about 0.02 per unit of risk. If you would invest  632.00  in VanEck Vectors Morningstar on September 29, 2024 and sell it today you would earn a total of  3.00  from holding VanEck Vectors Morningstar or generate 0.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

VanEck Vectors Morningstar  vs.  Xtrackers II

VanEck Vectors Morni

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck Vectors Morningstar has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, VanEck Vectors is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Xtrackers II

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xtrackers II has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Xtrackers is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with VanEck Vectors and Xtrackers

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

The idea behind VanEck Vectors Morningstar and Xtrackers II 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.