Correlation Between VanEck Semiconductor and SmartETFs Dividend

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

Diversification Opportunities for VanEck Semiconductor and SmartETFs Dividend

-0.41

Correlation Coefficient

VanEck Semiconductor  SmartETFs Dividend

Very good diversification

The 3 months correlation between VanEck and SmartETFs is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Semiconductor ETF and SmartETFs Dividend Builder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartETFs Dividend 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 SmartETFs Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartETFs Dividend has no effect on the direction of VanEck Semiconductor i.e., VanEck Semiconductor and SmartETFs Dividend go up and down completely randomly.

Pair Corralation between VanEck Semiconductor and SmartETFs Dividend

Considering the 90-day investment horizon VanEck Semiconductor ETF is expected to under-perform the SmartETFs Dividend. In addition to that, VanEck Semiconductor is 3.36 times more volatile than SmartETFs Dividend Builder. It trades about -0.08 of its total potential returns per unit of risk. SmartETFs Dividend Builder is currently generating about 0.05 per unit of volatility. If you would invest  2,850  in SmartETFs Dividend Builder on December 29, 2024 and sell it today you would earn a total of  62.00  from holding SmartETFs Dividend Builder or generate 2.18% return on investment over 90 days.

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

VanEck Semiconductor ETF  vs.  SmartETFs Dividend Builder

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.

SmartETFs Dividend

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SmartETFs Dividend Builder are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SmartETFs Dividend is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with VanEck Semiconductor and SmartETFs Dividend

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

The idea behind VanEck Semiconductor ETF and SmartETFs Dividend Builder 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.