Correlation Between VanEck Crypto and VanEck New

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

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

Diversification Opportunities for VanEck Crypto and VanEck New

0.34

Correlation Coefficient

VanEck Crypto  VanEck New

Weak 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 Crypto Blockchain and VanEck New China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck New China and VanEck Crypto 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 Crypto Blockchain are associated (or correlated) with VanEck New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck New China has no effect on the direction of VanEck Crypto i.e., VanEck Crypto and VanEck New go up and down completely randomly.

Pair Corralation between VanEck Crypto and VanEck New

Assuming the 90 days trading horizon VanEck Crypto Blockchain is expected to generate 1.29 times more return on investment than VanEck New. However, VanEck Crypto is 1.29 times more volatile than VanEck New China. It trades about 0.22 of its potential returns per unit of risk. VanEck New China is currently generating about 0.14 per unit of risk. If you would invest  733.00  in VanEck Crypto Blockchain on September 15, 2024 and sell it today you would earn a total of  537.00  from holding VanEck Crypto Blockchain or generate 73.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.48%
Values	Daily Returns

VanEck Crypto Blockchain  vs.  VanEck New China

VanEck Crypto Blockchain

Risk-Adjusted Performance

16 of 100

Solid

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

VanEck New China

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck New China are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, VanEck New unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VanEck Crypto and VanEck New

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

The idea behind VanEck Crypto Blockchain and VanEck New China 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.