Correlation Between VanEck Defense and Leverage Shares
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By analyzing existing cross correlation between VanEck Defense ETF and Leverage Shares 2x, you can compare the effects of market volatilities on VanEck Defense and Leverage Shares 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 Leverage Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Defense and Leverage Shares.
Diversification Opportunities for VanEck Defense and Leverage Shares
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and Leverage is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Defense ETF and Leverage Shares 2x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leverage Shares 2x 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 Leverage Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leverage Shares 2x has no effect on the direction of VanEck Defense i.e., VanEck Defense and Leverage Shares go up and down completely randomly.
Pair Corralation between VanEck Defense and Leverage Shares
Assuming the 90 days trading horizon VanEck Defense is expected to generate 2.86 times less return on investment than Leverage Shares. But when comparing it to its historical volatility, VanEck Defense ETF is 1.38 times less risky than Leverage Shares. It trades about 0.14 of its potential returns per unit of risk. Leverage Shares 2x is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 5,142 in Leverage Shares 2x on September 25, 2024 and sell it today you would earn a total of 2,215 from holding Leverage Shares 2x or generate 43.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.46% |
Values | Daily Returns |
VanEck Defense ETF vs. Leverage Shares 2x
Performance |
Timeline |
VanEck Defense ETF |
Leverage Shares 2x |
VanEck Defense and Leverage Shares Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with VanEck Defense and Leverage Shares
The main advantage of trading using opposite VanEck Defense and Leverage Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Defense position performs unexpectedly, Leverage Shares 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 Leverage Shares will offset losses from the drop in Leverage Shares' long position.VanEck Defense vs. VanEck Sustainable European | VanEck Defense vs. VanEck Solana ETN | VanEck Defense vs. VanEck Smart Contract | VanEck Defense vs. VanEck Vectors UCITS |
Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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