Correlation Between VIIX and VanEck ChiNext

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

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

Diversification Opportunities for VIIX and VanEck ChiNext

-0.57

Correlation Coefficient

VIIX  VanEck ChiNext

Excellent diversification

The 3 months correlation between VIIX and VanEck is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding VIIX and VanEck ChiNext ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck ChiNext ETF and VIIX 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 VIIX are associated (or correlated) with VanEck ChiNext. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck ChiNext ETF has no effect on the direction of VIIX i.e., VIIX and VanEck ChiNext go up and down completely randomly.

Pair Corralation between VIIX and VanEck ChiNext

If you would invest  2,034  in VanEck ChiNext ETF on September 2, 2024 and sell it today you would earn a total of  918.00  from holding VanEck ChiNext ETF or generate 45.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

VIIX  vs.  VanEck ChiNext ETF

VIIX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VIIX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, VIIX is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

VanEck ChiNext ETF

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck ChiNext ETF are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, VanEck ChiNext unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VIIX and VanEck ChiNext

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

The idea behind VIIX and VanEck ChiNext ETF 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.