Correlation Between Aemetis and VanEck Biotech
Can any of the company-specific risk be diversified away by investing in both Aemetis and VanEck Biotech 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 Aemetis and VanEck Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aemetis and VanEck Biotech ETF, you can compare the effects of market volatilities on Aemetis and VanEck Biotech 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 Aemetis with a short position of VanEck Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aemetis and VanEck Biotech.
Diversification Opportunities for Aemetis and VanEck Biotech
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aemetis and VanEck is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Aemetis and VanEck Biotech ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Biotech ETF and Aemetis 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 Aemetis are associated (or correlated) with VanEck Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Biotech ETF has no effect on the direction of Aemetis i.e., Aemetis and VanEck Biotech go up and down completely randomly.
Pair Corralation between Aemetis and VanEck Biotech
Given the investment horizon of 90 days Aemetis is expected to generate 11.75 times more return on investment than VanEck Biotech. However, Aemetis is 11.75 times more volatile than VanEck Biotech ETF. It trades about 0.12 of its potential returns per unit of risk. VanEck Biotech ETF is currently generating about -0.39 per unit of risk. If you would invest 307.00 in Aemetis on January 19, 2024 and sell it today you would earn a total of 59.00 from holding Aemetis or generate 19.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aemetis vs. VanEck Biotech ETF
Performance |
| Timeline |
| Aemetis |
| VanEck Biotech ETF |
Aemetis and VanEck Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aemetis and VanEck Biotech
The main advantage of trading using opposite Aemetis and VanEck Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aemetis position performs unexpectedly, VanEck Biotech 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 Biotech will offset losses from the drop in VanEck Biotech's long position.| Aemetis vs. PBF Energy | Aemetis vs. Clean Energy Fuels | Aemetis vs. Par Pacific Holdings | Aemetis vs. Vertex Energy |
| VanEck Biotech vs. VanEck Pharmaceutical ETF | VanEck Biotech vs. VanEck Retail ETF | VanEck Biotech vs. First Trust NYSE | VanEck Biotech vs. Invesco Dynamic Biotechnology |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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