Correlation Between VanEck Semiconductor and Xtrackers Artificial

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

Diversification Opportunities for VanEck Semiconductor and Xtrackers Artificial

0.67

Correlation Coefficient

VanEck Semiconductor  Xtrackers Artificial

Poor diversification

The 3 months correlation between VanEck and Xtrackers is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Semiconductor ETF and Xtrackers Artificial Intellige in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Artificial 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 Xtrackers Artificial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Artificial has no effect on the direction of VanEck Semiconductor i.e., VanEck Semiconductor and Xtrackers Artificial go up and down completely randomly.

Pair Corralation between VanEck Semiconductor and Xtrackers Artificial

Considering the 90-day investment horizon VanEck Semiconductor ETF is expected to under-perform the Xtrackers Artificial. In addition to that, VanEck Semiconductor is 1.32 times more volatile than Xtrackers Artificial Intelligence. It trades about -0.13 of its total potential returns per unit of risk. Xtrackers Artificial Intelligence is currently generating about -0.14 per unit of volatility. If you would invest  3,343  in Xtrackers Artificial Intelligence on December 29, 2024 and sell it today you would lose (193.00) from holding Xtrackers Artificial Intelligence or give up 5.77% of portfolio value over 90 days.

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

VanEck Semiconductor ETF  vs.  Xtrackers Artificial Intellige

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.

Xtrackers Artificial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xtrackers Artificial Intelligence has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Xtrackers Artificial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with VanEck Semiconductor and Xtrackers Artificial

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

The idea behind VanEck Semiconductor ETF and Xtrackers Artificial Intelligence 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.