Correlation Between VanEck TRON and IShares II

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

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

Diversification Opportunities for VanEck TRON and IShares II

0.19

Correlation Coefficient

VanEck TRON  IShares II

Average diversification

The 3 months correlation between VanEck and IShares is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding VanEck TRON ETN and iShares II Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares II Public and VanEck TRON 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 TRON ETN are associated (or correlated) with IShares II. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares II Public has no effect on the direction of VanEck TRON i.e., VanEck TRON and IShares II go up and down completely randomly.

Pair Corralation between VanEck TRON and IShares II

Assuming the 90 days trading horizon VanEck TRON ETN is expected to generate 13.41 times more return on investment than IShares II. However, VanEck TRON is 13.41 times more volatile than iShares II Public. It trades about 0.1 of its potential returns per unit of risk. iShares II Public is currently generating about 0.0 per unit of risk. If you would invest  1,594  in VanEck TRON ETN on September 23, 2024 and sell it today you would earn a total of  1,000.00  from holding VanEck TRON ETN or generate 62.74% return on investment over 90 days.

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

VanEck TRON ETN  vs.  iShares II Public

VanEck TRON ETN

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck TRON ETN are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, VanEck TRON unveiled solid returns over the last few months and may actually be approaching a breakup point.

iShares II Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares II Public has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, IShares II 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 TRON and IShares II

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

The idea behind VanEck TRON ETN and iShares II 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.