Correlation Between VanEck Biotech and EXT
Can any of the company-specific risk be diversified away by investing in both VanEck Biotech and EXT 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 Biotech and EXT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Biotech ETF and EXT, you can compare the effects of market volatilities on VanEck Biotech and EXT 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 Biotech with a short position of EXT. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Biotech and EXT.
Diversification Opportunities for VanEck Biotech and EXT
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between VanEck and EXT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Biotech ETF and EXT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXT and VanEck Biotech 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 Biotech ETF are associated (or correlated) with EXT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXT has no effect on the direction of VanEck Biotech i.e., VanEck Biotech and EXT go up and down completely randomly.
Pair Corralation between VanEck Biotech and EXT
If you would invest 14,866 in VanEck Biotech ETF on January 20, 2024 and sell it today you would earn a total of 333.00 from holding VanEck Biotech ETF or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
VanEck Biotech ETF vs. EXT
Performance |
| Timeline |
| VanEck Biotech ETF |
| EXT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
VanEck Biotech and EXT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Biotech and EXT
The main advantage of trading using opposite VanEck Biotech and EXT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Biotech position performs unexpectedly, EXT 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 EXT will offset losses from the drop in EXT's long position.| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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