Correlation Between VanEck Semiconductor and VanEck Solana

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

By analyzing existing cross correlation between VanEck Semiconductor UCITS and VanEck Solana ETN, you can compare the effects of market volatilities on VanEck Semiconductor and VanEck Solana 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 VanEck Solana. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Semiconductor and VanEck Solana.

Diversification Opportunities for VanEck Semiconductor and VanEck Solana

0.16

Correlation Coefficient

VanEck Semiconductor  VanEck Solana

Average diversification

The 3 months correlation between VanEck and VanEck is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Semiconductor UCITS and VanEck Solana ETN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Solana ETN 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 UCITS are associated (or correlated) with VanEck Solana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Solana ETN has no effect on the direction of VanEck Semiconductor i.e., VanEck Semiconductor and VanEck Solana go up and down completely randomly.

Pair Corralation between VanEck Semiconductor and VanEck Solana

Assuming the 90 days trading horizon VanEck Semiconductor is expected to generate 6.16 times less return on investment than VanEck Solana. But when comparing it to its historical volatility, VanEck Semiconductor UCITS is 2.73 times less risky than VanEck Solana. It trades about 0.09 of its potential returns per unit of risk. VanEck Solana ETN is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  602.00  in VanEck Solana ETN on September 15, 2024 and sell it today you would earn a total of  466.00  from holding VanEck Solana ETN or generate 77.41% return on investment over 90 days.

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

VanEck Semiconductor UCITS  vs.  VanEck Solana ETN

VanEck Semiconductor

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Semiconductor UCITS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, VanEck Semiconductor may actually be approaching a critical reversion point that can send shares even higher in January 2025.

VanEck Solana ETN

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Solana ETN are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, VanEck Solana showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VanEck Semiconductor and VanEck Solana

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

The idea behind VanEck Semiconductor UCITS and VanEck Solana ETN 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.