Correlation Between VanEck Defense and WisdomTree STOXX
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By analyzing existing cross correlation between VanEck Defense ETF and WisdomTree STOXX Europe, you can compare the effects of market volatilities on VanEck Defense and WisdomTree STOXX 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 Defense with a short position of WisdomTree STOXX. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Defense and WisdomTree STOXX.
Diversification Opportunities for VanEck Defense and WisdomTree STOXX
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between VanEck and WisdomTree is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Defense ETF and WisdomTree STOXX Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree STOXX Europe and VanEck Defense 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 Defense ETF are associated (or correlated) with WisdomTree STOXX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree STOXX Europe has no effect on the direction of VanEck Defense i.e., VanEck Defense and WisdomTree STOXX go up and down completely randomly.
Pair Corralation between VanEck Defense and WisdomTree STOXX
Assuming the 90 days trading horizon VanEck Defense ETF is expected to generate 0.6 times more return on investment than WisdomTree STOXX. However, VanEck Defense ETF is 1.68 times less risky than WisdomTree STOXX. It trades about 0.14 of its potential returns per unit of risk. WisdomTree STOXX Europe is currently generating about -0.09 per unit of risk. If you would invest 3,079 in VanEck Defense ETF on September 26, 2024 and sell it today you would earn a total of 403.00 from holding VanEck Defense ETF or generate 13.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
VanEck Defense ETF vs. WisdomTree STOXX Europe
Performance |
Timeline |
VanEck Defense ETF |
WisdomTree STOXX Europe |
VanEck Defense and WisdomTree STOXX Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with VanEck Defense and WisdomTree STOXX
The main advantage of trading using opposite VanEck Defense and WisdomTree STOXX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Defense position performs unexpectedly, WisdomTree STOXX 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 WisdomTree STOXX will offset losses from the drop in WisdomTree STOXX's long position.VanEck Defense vs. UBS Fund Solutions | VanEck Defense vs. Xtrackers II | VanEck Defense vs. Xtrackers Nikkei 225 | VanEck Defense vs. iShares VII PLC |
WisdomTree STOXX vs. UBS Fund Solutions | WisdomTree STOXX vs. Xtrackers II | WisdomTree STOXX vs. Xtrackers Nikkei 225 | WisdomTree STOXX vs. iShares VII PLC |
Check out your portfolio center.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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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