Correlation Between VanEck Global and SPDR SP
Can any of the company-specific risk be diversified away by investing in both VanEck Global and SPDR SP 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 Global and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Global Listed and SPDR SP World, you can compare the effects of market volatilities on VanEck Global and SPDR SP 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 Global with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Global and SPDR SP.
Diversification Opportunities for VanEck Global and SPDR SP
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and SPDR is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Global Listed and SPDR SP World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP World and VanEck Global 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 Global Listed are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP World has no effect on the direction of VanEck Global i.e., VanEck Global and SPDR SP go up and down completely randomly.
Pair Corralation between VanEck Global and SPDR SP
Assuming the 90 days trading horizon VanEck Global Listed is expected to generate 1.54 times more return on investment than SPDR SP. However, VanEck Global is 1.54 times more volatile than SPDR SP World. It trades about 0.24 of its potential returns per unit of risk. SPDR SP World is currently generating about 0.25 per unit of risk. If you would invest 2,230 in VanEck Global Listed on September 26, 2024 and sell it today you would earn a total of 330.00 from holding VanEck Global Listed or generate 14.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
VanEck Global Listed vs. SPDR SP World
Performance |
Timeline |
VanEck Global Listed |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
SPDR SP World |
VanEck Global and SPDR SP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with VanEck Global and SPDR SP
The main advantage of trading using opposite VanEck Global and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Global position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP's long position.VanEck Global vs. VanEck Vectors Australian | VanEck Global vs. VanEck FTSE China | VanEck Global vs. VanEck MSCI International | VanEck Global vs. VanEck Global Clean |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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