Correlation Between VanEck AMX and VanEck Multi

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

By analyzing existing cross correlation between VanEck AMX UCITS and VanEck Multi Asset Conservative, you can compare the effects of market volatilities on VanEck AMX and VanEck Multi 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 AMX with a short position of VanEck Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck AMX and VanEck Multi.

Diversification Opportunities for VanEck AMX and VanEck Multi

0.39

Correlation Coefficient

VanEck AMX  VanEck Multi

Weak diversification

The 3 months correlation between VanEck and VanEck is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding VanEck AMX UCITS and VanEck Multi Asset Conservativ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Multi Asset and VanEck AMX 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 AMX UCITS are associated (or correlated) with VanEck Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Multi Asset has no effect on the direction of VanEck AMX i.e., VanEck AMX and VanEck Multi go up and down completely randomly.

Pair Corralation between VanEck AMX and VanEck Multi

Assuming the 90 days trading horizon VanEck AMX UCITS is expected to generate 2.73 times more return on investment than VanEck Multi. However, VanEck AMX is 2.73 times more volatile than VanEck Multi Asset Conservative. It trades about 0.07 of its potential returns per unit of risk. VanEck Multi Asset Conservative is currently generating about -0.14 per unit of risk. If you would invest  9,315  in VanEck AMX UCITS on March 5, 2024 and sell it today you would earn a total of  75.00  from holding VanEck AMX UCITS or generate 0.81% return on investment over 90 days.

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

VanEck AMX UCITS  vs.  VanEck Multi Asset Conservativ

VanEck AMX UCITS

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck AMX UCITS are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, VanEck AMX is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

VanEck Multi Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck Multi Asset Conservative has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, VanEck Multi 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 AMX and VanEck Multi

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

The idea behind VanEck AMX UCITS and VanEck Multi Asset Conservative 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.