Correlation Between VanEck Solana and IShares VII

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

By analyzing existing cross correlation between VanEck Solana ETN and iShares VII Public, you can compare the effects of market volatilities on VanEck Solana and IShares VII 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 Solana with a short position of IShares VII. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Solana and IShares VII.

Diversification Opportunities for VanEck Solana and IShares VII

-0.56

Correlation Coefficient

VanEck Solana  IShares VII

Excellent diversification

The 3 months correlation between VanEck and IShares is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Solana ETN and iShares VII Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares VII Public and VanEck Solana 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 Solana ETN are associated (or correlated) with IShares VII. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares VII Public has no effect on the direction of VanEck Solana i.e., VanEck Solana and IShares VII go up and down completely randomly.

Pair Corralation between VanEck Solana and IShares VII

Assuming the 90 days trading horizon VanEck Solana ETN is expected to generate 3.82 times more return on investment than IShares VII. However, VanEck Solana is 3.82 times more volatile than iShares VII Public. It trades about 0.11 of its potential returns per unit of risk. iShares VII Public is currently generating about -0.01 per unit of risk. If you would invest  776.00  in VanEck Solana ETN on September 22, 2024 and sell it today you would earn a total of  251.00  from holding VanEck Solana ETN or generate 32.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.97%
Values	Daily Returns

VanEck Solana ETN  vs.  iShares VII Public

VanEck Solana ETN

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Solana ETN are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, VanEck Solana unveiled solid returns over the last few months and may actually be approaching a breakup point.

iShares VII Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares VII Public has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, IShares VII is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with VanEck Solana and IShares VII

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

The idea behind VanEck Solana ETN and iShares VII Public 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.