Correlation Between VanEck Sustainable and VanEck Solana

Can any of the company-specific risk be diversified away by investing in both VanEck Sustainable 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 Sustainable 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 Sustainable European and VanEck Solana ETN, you can compare the effects of market volatilities on VanEck Sustainable 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 Sustainable with a short position of VanEck Solana. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Sustainable and VanEck Solana.

Diversification Opportunities for VanEck Sustainable and VanEck Solana

-0.34

Correlation Coefficient

VanEck Sustainable  VanEck Solana

Very good diversification

The 3 months correlation between VanEck and VanEck is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Sustainable European 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 Sustainable 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 Sustainable European 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 Sustainable i.e., VanEck Sustainable and VanEck Solana go up and down completely randomly.

Pair Corralation between VanEck Sustainable and VanEck Solana

Assuming the 90 days trading horizon VanEck Sustainable European is expected to generate 0.11 times more return on investment than VanEck Solana. However, VanEck Sustainable European is 9.2 times less risky than VanEck Solana. It trades about -0.11 of its potential returns per unit of risk. VanEck Solana ETN is currently generating about -0.22 per unit of risk. If you would invest  7,565  in VanEck Sustainable European on September 27, 2024 and sell it today you would lose (88.00) from holding VanEck Sustainable European or give up 1.16% of portfolio value over 90 days.

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

VanEck Sustainable European  vs.  VanEck Solana ETN

VanEck Sustainable

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck Sustainable European has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, VanEck Sustainable is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

VanEck Solana ETN

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Solana ETN are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, VanEck Solana exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VanEck Sustainable and VanEck Solana

The main advantage of trading using opposite VanEck Sustainable and VanEck Solana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Sustainable 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 Sustainable European 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.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.