Correlation Between VanEck Sustainable and VanEck AMX

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

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

Diversification Opportunities for VanEck Sustainable and VanEck AMX

-0.54

Correlation Coefficient

VanEck Sustainable  VanEck AMX

Excellent diversification

The 3 months correlation between VanEck and VanEck is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Sustainable World and VanEck AMX UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck AMX UCITS and VanEck Sustainable 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 Sustainable World are associated (or correlated) with VanEck AMX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck AMX UCITS has no effect on the direction of VanEck Sustainable i.e., VanEck Sustainable and VanEck AMX go up and down completely randomly.

Pair Corralation between VanEck Sustainable and VanEck AMX

Assuming the 90 days trading horizon VanEck Sustainable World is expected to generate 0.76 times more return on investment than VanEck AMX. However, VanEck Sustainable World is 1.31 times less risky than VanEck AMX. It trades about 0.09 of its potential returns per unit of risk. VanEck AMX UCITS is currently generating about -0.14 per unit of risk. If you would invest  3,227  in VanEck Sustainable World on September 25, 2024 and sell it today you would earn a total of  101.00  from holding VanEck Sustainable World or generate 3.13% return on investment over 90 days.

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

VanEck Sustainable World  vs.  VanEck AMX UCITS

VanEck Sustainable World

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Sustainable World are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, VanEck Sustainable is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

VanEck AMX UCITS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck AMX UCITS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Pair Trading with VanEck Sustainable and VanEck AMX

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

The idea behind VanEck Sustainable World and VanEck AMX UCITS 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.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.