Correlation Between Dow Jones and VanEck Vectors
Can any of the company-specific risk be diversified away by investing in both Dow Jones and VanEck Vectors 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 Dow Jones and VanEck Vectors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and VanEck Vectors UCITS, you can compare the effects of market volatilities on Dow Jones and VanEck Vectors 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 Dow Jones with a short position of VanEck Vectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and VanEck Vectors.
Diversification Opportunities for Dow Jones and VanEck Vectors
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dow and VanEck is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and VanEck Vectors UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Vectors UCITS and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with VanEck Vectors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Vectors UCITS has no effect on the direction of Dow Jones i.e., Dow Jones and VanEck Vectors go up and down completely randomly.
Pair Corralation between Dow Jones and VanEck Vectors
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.6 times less return on investment than VanEck Vectors. In addition to that, Dow Jones is 1.56 times more volatile than VanEck Vectors UCITS. It trades about 0.11 of its total potential returns per unit of risk. VanEck Vectors UCITS is currently generating about 0.28 per unit of volatility. If you would invest 10,857 in VanEck Vectors UCITS on September 16, 2024 and sell it today you would earn a total of 976.00 from holding VanEck Vectors UCITS or generate 8.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.48% |
Values | Daily Returns |
Dow Jones Industrial vs. VanEck Vectors UCITS
Performance |
Timeline |
Dow Jones and VanEck Vectors Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
VanEck Vectors UCITS
Pair trading matchups for VanEck Vectors
Pair Trading with Dow Jones and VanEck Vectors
The main advantage of trading using opposite Dow Jones and VanEck Vectors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, VanEck Vectors 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 Vectors will offset losses from the drop in VanEck Vectors' long position.Dow Jones vs. Ironveld Plc | Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Mid Atlantic Home Health | Dow Jones vs. United Homes Group |
VanEck Vectors vs. UBS Fund Solutions | VanEck Vectors vs. Xtrackers II | VanEck Vectors vs. Xtrackers Nikkei 225 | VanEck Vectors 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation |