Correlation Between Global X and VanEck Mortgage
Can any of the company-specific risk be diversified away by investing in both Global X and VanEck Mortgage 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 Global X and VanEck Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X SuperDividend and VanEck Mortgage REIT, you can compare the effects of market volatilities on Global X and VanEck Mortgage 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 Global X with a short position of VanEck Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and VanEck Mortgage.
Diversification Opportunities for Global X and VanEck Mortgage
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and VanEck is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Global X SuperDividend and VanEck Mortgage REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Mortgage REIT and Global X 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 Global X SuperDividend are associated (or correlated) with VanEck Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Mortgage REIT has no effect on the direction of Global X i.e., Global X and VanEck Mortgage go up and down completely randomly.
Pair Corralation between Global X and VanEck Mortgage
Given the investment horizon of 90 days Global X is expected to generate 11.43 times less return on investment than VanEck Mortgage. But when comparing it to its historical volatility, Global X SuperDividend is 1.9 times less risky than VanEck Mortgage. It trades about 0.02 of its potential returns per unit of risk. VanEck Mortgage REIT is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,104 in VanEck Mortgage REIT on December 5, 2024 and sell it today you would earn a total of 33.00 from holding VanEck Mortgage REIT or generate 2.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Global X SuperDividend vs. VanEck Mortgage REIT
Performance |
Timeline |
Global X SuperDividend |
VanEck Mortgage REIT |
Global X and VanEck Mortgage Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Global X and VanEck Mortgage
The main advantage of trading using opposite Global X and VanEck Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, VanEck Mortgage 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 Mortgage will offset losses from the drop in VanEck Mortgage's long position.Global X vs. Global X SuperDividend | Global X vs. Invesco KBW High | Global X vs. Global X SuperDividend | Global X vs. Invesco SP 500 |
VanEck Mortgage vs. iShares Mortgage Real | VanEck Mortgage vs. Invesco KBW Premium | VanEck Mortgage vs. VanEck BDC Income | VanEck Mortgage vs. Global X SuperDividend |
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.
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