Correlation Between VanEck Vectors and VictoryShares THB

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

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

Diversification Opportunities for VanEck Vectors and VictoryShares THB

0.05

Correlation Coefficient

VanEck Vectors  VictoryShares THB

Significant diversification

The 3 months correlation between VanEck and VictoryShares is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vectors ETF and VictoryShares THB Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VictoryShares THB Mid and VanEck Vectors 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 Vectors ETF are associated (or correlated) with VictoryShares THB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VictoryShares THB Mid has no effect on the direction of VanEck Vectors i.e., VanEck Vectors and VictoryShares THB go up and down completely randomly.

Pair Corralation between VanEck Vectors and VictoryShares THB

Considering the 90-day investment horizon VanEck Vectors is expected to generate 9.04 times less return on investment than VictoryShares THB. But when comparing it to its historical volatility, VanEck Vectors ETF is 3.06 times less risky than VictoryShares THB. It trades about 0.03 of its potential returns per unit of risk. VictoryShares THB Mid is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,836  in VictoryShares THB Mid on September 12, 2024 and sell it today you would earn a total of  141.00  from holding VictoryShares THB Mid or generate 4.97% return on investment over 90 days.

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

VanEck Vectors ETF  vs.  VictoryShares THB Mid

VanEck Vectors ETF

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Vectors ETF are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong primary indicators, VanEck Vectors is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

VictoryShares THB Mid

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VictoryShares THB Mid are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, VictoryShares THB is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with VanEck Vectors and VictoryShares THB

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

The idea behind VanEck Vectors ETF and VictoryShares THB Mid 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.