Correlation Between VanEck Vietnam and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both VanEck Vietnam and IShares MSCI 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 Vietnam and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Vietnam ETF and iShares MSCI Germany, you can compare the effects of market volatilities on VanEck Vietnam and IShares MSCI 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 Vietnam with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Vietnam and IShares MSCI.
Diversification Opportunities for VanEck Vietnam and IShares MSCI
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VanEck and IShares is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vietnam ETF and iShares MSCI Germany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Germany and VanEck Vietnam 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 Vietnam ETF are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI Germany has no effect on the direction of VanEck Vietnam i.e., VanEck Vietnam and IShares MSCI go up and down completely randomly.
Pair Corralation between VanEck Vietnam and IShares MSCI
Considering the 90-day investment horizon VanEck Vietnam ETF is expected to under-perform the IShares MSCI. In addition to that, VanEck Vietnam is 1.86 times more volatile than iShares MSCI Germany. It trades about -0.04 of its total potential returns per unit of risk. iShares MSCI Germany is currently generating about 0.03 per unit of volatility. If you would invest 2,942 in iShares MSCI Germany on January 24, 2024 and sell it today you would earn a total of 151.00 from holding iShares MSCI Germany or generate 5.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Vietnam ETF vs. iShares MSCI Germany
Performance |
| Timeline |
| VanEck Vietnam ETF |
| iShares MSCI Germany |
VanEck Vietnam and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Vietnam and IShares MSCI
The main advantage of trading using opposite VanEck Vietnam and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Vietnam position performs unexpectedly, IShares MSCI 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 MSCI will offset losses from the drop in IShares MSCI's long position.The idea behind VanEck Vietnam ETF and iShares MSCI Germany 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.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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |