Correlation Between VanEck UraniumNuclear and VanEck Gaming

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

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

Diversification Opportunities for VanEck UraniumNuclear and VanEck Gaming

0.66

Correlation Coefficient

VanEck UraniumNuclear  VanEck Gaming

Poor diversification

The 3 months correlation between VanEck and VanEck is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding VanEck UraniumNuclear Energy and VanEck Gaming ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Gaming ETF and VanEck UraniumNuclear 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 UraniumNuclear Energy are associated (or correlated) with VanEck Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Gaming ETF has no effect on the direction of VanEck UraniumNuclear i.e., VanEck UraniumNuclear and VanEck Gaming go up and down completely randomly.

Pair Corralation between VanEck UraniumNuclear and VanEck Gaming

Considering the 90-day investment horizon VanEck UraniumNuclear Energy is expected to under-perform the VanEck Gaming. In addition to that, VanEck UraniumNuclear is 2.61 times more volatile than VanEck Gaming ETF. It trades about -0.03 of its total potential returns per unit of risk. VanEck Gaming ETF is currently generating about 0.04 per unit of volatility. If you would invest  4,420  in VanEck Gaming ETF on September 12, 2024 and sell it today you would earn a total of  25.27  from holding VanEck Gaming ETF or generate 0.57% return on investment over 90 days.

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

VanEck UraniumNuclear Energy  vs.  VanEck Gaming ETF

VanEck UraniumNuclear

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck UraniumNuclear Energy are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak essential indicators, VanEck UraniumNuclear reported solid returns over the last few months and may actually be approaching a breakup point.

VanEck Gaming ETF

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Gaming ETF are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite sluggish forward-looking indicators, VanEck Gaming may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with VanEck UraniumNuclear and VanEck Gaming

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

The idea behind VanEck UraniumNuclear Energy and VanEck Gaming ETF 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.