Correlation Between Xtrackers Nikkei and VanEck Defense
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By analyzing existing cross correlation between Xtrackers Nikkei 225 and VanEck Defense ETF, you can compare the effects of market volatilities on Xtrackers Nikkei and VanEck Defense 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 Xtrackers Nikkei with a short position of VanEck Defense. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Nikkei and VanEck Defense.
Diversification Opportunities for Xtrackers Nikkei and VanEck Defense
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Xtrackers and VanEck is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Nikkei 225 and VanEck Defense ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Defense ETF and Xtrackers Nikkei 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 Xtrackers Nikkei 225 are associated (or correlated) with VanEck Defense. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Defense ETF has no effect on the direction of Xtrackers Nikkei i.e., Xtrackers Nikkei and VanEck Defense go up and down completely randomly.
Pair Corralation between Xtrackers Nikkei and VanEck Defense
Assuming the 90 days trading horizon Xtrackers Nikkei 225 is expected to generate 0.92 times more return on investment than VanEck Defense. However, Xtrackers Nikkei 225 is 1.09 times less risky than VanEck Defense. It trades about -0.01 of its potential returns per unit of risk. VanEck Defense ETF is currently generating about -0.1 per unit of risk. If you would invest 2,474 in Xtrackers Nikkei 225 on September 26, 2024 and sell it today you would lose (6.00) from holding Xtrackers Nikkei 225 or give up 0.24% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Xtrackers Nikkei 225 vs. VanEck Defense ETF
Performance |
Timeline |
Xtrackers Nikkei 225 |
VanEck Defense ETF |
Xtrackers Nikkei and VanEck Defense Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xtrackers Nikkei and VanEck Defense
The main advantage of trading using opposite Xtrackers Nikkei and VanEck Defense positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Nikkei position performs unexpectedly, VanEck Defense 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 Defense will offset losses from the drop in VanEck Defense's long position.Xtrackers Nikkei vs. UBS Fund Solutions | Xtrackers Nikkei vs. Xtrackers II | Xtrackers Nikkei vs. iShares VII PLC | Xtrackers Nikkei vs. SPDR Gold Shares |
VanEck Defense vs. UBS Fund Solutions | VanEck Defense vs. Xtrackers II | VanEck Defense vs. Xtrackers Nikkei 225 | VanEck Defense vs. iShares VII PLC |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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