Correlation Between VanEck Vectors and ESGL Holdings

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

By analyzing existing cross correlation between VanEck Vectors Moodys and ESGL Holdings Limited, you can compare the effects of market volatilities on VanEck Vectors and ESGL Holdings 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 Vectors with a short position of ESGL Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Vectors and ESGL Holdings.

Diversification Opportunities for VanEck Vectors and ESGL Holdings

0.31

Correlation Coefficient

VanEck Vectors  ESGL Holdings

Weak diversification

The 3 months correlation between VanEck and ESGL is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vectors Moodys and ESGL Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESGL Holdings Limited and VanEck Vectors 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 Vectors Moodys are associated (or correlated) with ESGL Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESGL Holdings Limited has no effect on the direction of VanEck Vectors i.e., VanEck Vectors and ESGL Holdings go up and down completely randomly.

Pair Corralation between VanEck Vectors and ESGL Holdings

Given the investment horizon of 90 days VanEck Vectors Moodys is expected to generate 0.05 times more return on investment than ESGL Holdings. However, VanEck Vectors Moodys is 18.25 times less risky than ESGL Holdings. It trades about 0.06 of its potential returns per unit of risk. ESGL Holdings Limited is currently generating about -0.01 per unit of risk. If you would invest  1,862  in VanEck Vectors Moodys on September 28, 2024 and sell it today you would earn a total of  253.00  from holding VanEck Vectors Moodys or generate 13.59% return on investment over 90 days.

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

VanEck Vectors Moodys  vs.  ESGL Holdings Limited

VanEck Vectors Moodys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck Vectors Moodys has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, VanEck Vectors is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ESGL Holdings Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ESGL Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Etf's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.

Pair Trading with VanEck Vectors and ESGL Holdings

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

The idea behind VanEck Vectors Moodys and ESGL Holdings Limited 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.