Correlation Between VanEck ETF and VanEck ETF

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Can any of the company-specific risk be diversified away by investing in both VanEck ETF and VanEck ETF 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 ETF and VanEck ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck ETF Trust and VanEck ETF Trust, you can compare the effects of market volatilities on VanEck ETF and VanEck ETF 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 ETF with a short position of VanEck ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck ETF and VanEck ETF.

Diversification Opportunities for VanEck ETF and VanEck ETF

0.93
  Correlation Coefficient

Almost no diversification

The 3 months correlation between VanEck and VanEck is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding VanEck ETF Trust and VanEck ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck ETF Trust and VanEck ETF 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 ETF Trust are associated (or correlated) with VanEck ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck ETF Trust has no effect on the direction of VanEck ETF i.e., VanEck ETF and VanEck ETF go up and down completely randomly.

Pair Corralation between VanEck ETF and VanEck ETF

Given the investment horizon of 90 days VanEck ETF Trust is expected to under-perform the VanEck ETF. But the etf apears to be less risky and, when comparing its historical volatility, VanEck ETF Trust is 1.16 times less risky than VanEck ETF. The etf trades about -0.3 of its potential returns per unit of risk. The VanEck ETF Trust is currently generating about -0.23 of returns per unit of risk over similar time horizon. If you would invest  3,625  in VanEck ETF Trust on October 11, 2024 and sell it today you would lose (160.00) from holding VanEck ETF Trust or give up 4.41% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

VanEck ETF Trust  vs.  VanEck ETF Trust

 Performance 
       Timeline  
VanEck ETF Trust 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days VanEck ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, VanEck ETF is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.
VanEck ETF Trust 

Risk-Adjusted Performance

0 of 100

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

VanEck ETF and VanEck ETF Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with VanEck ETF and VanEck ETF

The main advantage of trading using opposite VanEck ETF and VanEck ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck ETF position performs unexpectedly, VanEck ETF 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 ETF will offset losses from the drop in VanEck ETF's long position.
The idea behind VanEck ETF Trust and VanEck ETF Trust 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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