Correlation Between VanEck Crypto and Multi Units

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

By analyzing existing cross correlation between VanEck Crypto and and Multi Units Luxembourg, you can compare the effects of market volatilities on VanEck Crypto and Multi Units 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 Multi Units. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Crypto and Multi Units.

Diversification Opportunities for VanEck Crypto and Multi Units

-0.55

Correlation Coefficient

VanEck Crypto  Multi Units

Excellent diversification

The 3 months correlation between VanEck and Multi is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Crypto and and Multi Units Luxembourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Units Luxembourg 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 and are associated (or correlated) with Multi Units. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Units Luxembourg has no effect on the direction of VanEck Crypto i.e., VanEck Crypto and Multi Units go up and down completely randomly.

Pair Corralation between VanEck Crypto and Multi Units

Assuming the 90 days trading horizon VanEck Crypto and is expected to generate 5.55 times more return on investment than Multi Units. However, VanEck Crypto is 5.55 times more volatile than Multi Units Luxembourg. It trades about 0.21 of its potential returns per unit of risk. Multi Units Luxembourg is currently generating about 0.0 per unit of risk. If you would invest  663.00  in VanEck Crypto and on September 14, 2024 and sell it today you would earn a total of  530.00  from holding VanEck Crypto and or generate 79.94% return on investment over 90 days.

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

VanEck Crypto and  vs.  Multi Units Luxembourg

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 fragile basic indicators, VanEck Crypto reported solid returns over the last few months and may actually be approaching a breakup point.

Multi Units Luxembourg

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Multi Units Luxembourg has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Multi Units is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with VanEck Crypto and Multi Units

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

The idea behind VanEck Crypto and and Multi Units Luxembourg 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 Global Correlations module to find global opportunities by holding instruments from different markets.