Correlation Between VanEck Polkadot and VanEck AEX

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

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

Diversification Opportunities for VanEck Polkadot and VanEck AEX

-0.17

Correlation Coefficient

VanEck Polkadot  VanEck AEX

Good diversification

The 3 months correlation between VanEck and VanEck is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Polkadot ETN and VanEck AEX UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck AEX UCITS and VanEck Polkadot 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 Polkadot ETN are associated (or correlated) with VanEck AEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck AEX UCITS has no effect on the direction of VanEck Polkadot i.e., VanEck Polkadot and VanEck AEX go up and down completely randomly.

Pair Corralation between VanEck Polkadot and VanEck AEX

Assuming the 90 days trading horizon VanEck Polkadot ETN is expected to generate 11.62 times more return on investment than VanEck AEX. However, VanEck Polkadot is 11.62 times more volatile than VanEck AEX UCITS. It trades about 0.15 of its potential returns per unit of risk. VanEck AEX UCITS is currently generating about 0.0 per unit of risk. If you would invest  146.00  in VanEck Polkadot ETN on September 13, 2024 and sell it today you would earn a total of  139.00  from holding VanEck Polkadot ETN or generate 95.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

VanEck Polkadot ETN  vs.  VanEck AEX UCITS

VanEck Polkadot ETN

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Polkadot ETN are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, VanEck Polkadot unveiled solid returns over the last few months and may actually be approaching a breakup point.

VanEck AEX UCITS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck AEX UCITS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, VanEck AEX is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with VanEck Polkadot and VanEck AEX

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

The idea behind VanEck Polkadot ETN and VanEck AEX UCITS 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.