Correlation Between VanEck IBoxx and VanEck Smart

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

By analyzing existing cross correlation between VanEck IBoxx EUR and VanEck Smart Home, you can compare the effects of market volatilities on VanEck IBoxx and VanEck Smart 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 IBoxx with a short position of VanEck Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck IBoxx and VanEck Smart.

Diversification Opportunities for VanEck IBoxx and VanEck Smart

0.0

Correlation Coefficient

VanEck IBoxx  VanEck Smart

Pay attention - limited upside

The 3 months correlation between VanEck and VanEck is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding VanEck IBoxx EUR and VanEck Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Smart Home and VanEck IBoxx 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 IBoxx EUR are associated (or correlated) with VanEck Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Smart Home has no effect on the direction of VanEck IBoxx i.e., VanEck IBoxx and VanEck Smart go up and down completely randomly.

Pair Corralation between VanEck IBoxx and VanEck Smart

If you would invest (100.00) in VanEck Smart Home on September 15, 2024 and sell it today you would earn a total of  100.00  from holding VanEck Smart Home or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

VanEck IBoxx EUR  vs.  VanEck Smart Home

VanEck IBoxx EUR

Risk-Adjusted Performance

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Very Weak

Over the last 90 days VanEck IBoxx EUR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, VanEck IBoxx is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

VanEck Smart Home

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with VanEck IBoxx and VanEck Smart

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

The idea behind VanEck IBoxx EUR and VanEck Smart Home 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.