Correlation Between VanEck Semiconductor and IShares California

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

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

Diversification Opportunities for VanEck Semiconductor and IShares California

-0.15

Correlation Coefficient

VanEck Semiconductor  IShares California

Good diversification

The 3 months correlation between VanEck and IShares is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Semiconductor ETF and iShares California Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares California Muni and VanEck Semiconductor 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 Semiconductor ETF are associated (or correlated) with IShares California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares California Muni has no effect on the direction of VanEck Semiconductor i.e., VanEck Semiconductor and IShares California go up and down completely randomly.

Pair Corralation between VanEck Semiconductor and IShares California

Considering the 90-day investment horizon VanEck Semiconductor ETF is expected to under-perform the IShares California. In addition to that, VanEck Semiconductor is 11.67 times more volatile than iShares California Muni. It trades about -0.08 of its total potential returns per unit of risk. iShares California Muni is currently generating about -0.12 per unit of volatility. If you would invest  5,706  in iShares California Muni on December 28, 2024 and sell it today you would lose (92.00) from holding iShares California Muni or give up 1.61% of portfolio value over 90 days.

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

VanEck Semiconductor ETF  vs.  iShares California Muni

VanEck Semiconductor ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days VanEck Semiconductor ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's primary indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the Etf traders.

iShares California Muni

Risk-Adjusted Performance

Very Weak

Over the last 90 days iShares California Muni has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, IShares California 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 Semiconductor and IShares California

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

The idea behind VanEck Semiconductor ETF and iShares California Muni 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.