Correlation Between TSJA and VanEck Agribusiness

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

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

Diversification Opportunities for TSJA and VanEck Agribusiness

0.0

Correlation Coefficient

TSJA  VanEck Agribusiness

Pay attention - limited upside

The 3 months correlation between TSJA and VanEck is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TSJA and VanEck Agribusiness ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Agribusiness ETF and TSJA 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 TSJA are associated (or correlated) with VanEck Agribusiness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Agribusiness ETF has no effect on the direction of TSJA i.e., TSJA and VanEck Agribusiness go up and down completely randomly.

Pair Corralation between TSJA and VanEck Agribusiness

If you would invest  6,472  in VanEck Agribusiness ETF on December 20, 2024 and sell it today you would earn a total of  474.00  from holding VanEck Agribusiness ETF or generate 7.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

TSJA  vs.  VanEck Agribusiness ETF

TSJA

Risk-Adjusted Performance

Very Weak

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

VanEck Agribusiness ETF

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Agribusiness ETF are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, VanEck Agribusiness may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with TSJA and VanEck Agribusiness

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

The idea behind TSJA and VanEck Agribusiness ETF 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.