Correlation Between VanEck Solana and VanEck Crypto

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

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

Diversification Opportunities for VanEck Solana and VanEck Crypto

0.98

Correlation Coefficient

VanEck Solana  VanEck Crypto

Almost no diversification

The 3 months correlation between VanEck and VanEck is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Solana ETN and VanEck Crypto and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Crypto and VanEck Solana 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 Solana ETN are associated (or correlated) with VanEck Crypto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Crypto has no effect on the direction of VanEck Solana i.e., VanEck Solana and VanEck Crypto go up and down completely randomly.

Pair Corralation between VanEck Solana and VanEck Crypto

Assuming the 90 days trading horizon VanEck Solana ETN is expected to generate 1.0 times more return on investment than VanEck Crypto. However, VanEck Solana ETN is 1.0 times less risky than VanEck Crypto. It trades about 0.21 of its potential returns per unit of risk. VanEck Crypto and is currently generating about 0.21 per unit of risk. If you would invest  616.00  in VanEck Solana ETN on September 18, 2024 and sell it today you would earn a total of  507.00  from holding VanEck Solana ETN or generate 82.31% return on investment over 90 days.

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

VanEck Solana ETN  vs.  VanEck Crypto and

VanEck Solana ETN

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Solana ETN are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile essential indicators, VanEck Solana exhibited solid returns over the last few months and may actually be approaching a breakup point.

VanEck Crypto

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Crypto and are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, VanEck Crypto reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VanEck Solana and VanEck Crypto

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

The idea behind VanEck Solana ETN and VanEck Crypto and 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.