Correlation Between IShares Trust and Vaneck Vectors

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

By analyzing existing cross correlation between iShares Trust and Vaneck Vectors Semiconductor, you can compare the effects of market volatilities on IShares Trust and Vaneck Vectors 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 IShares Trust with a short position of Vaneck Vectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and Vaneck Vectors.

Diversification Opportunities for IShares Trust and Vaneck Vectors

0.0

Correlation Coefficient

IShares Trust  Vaneck Vectors

Pay attention - limited upside

The 3 months correlation between IShares and Vaneck is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and Vaneck Vectors Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaneck Vectors Semic and IShares Trust 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 iShares Trust are associated (or correlated) with Vaneck Vectors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaneck Vectors Semic has no effect on the direction of IShares Trust i.e., IShares Trust and Vaneck Vectors go up and down completely randomly.

Pair Corralation between IShares Trust and Vaneck Vectors

If you would invest  229,708  in Vaneck Vectors Semiconductor on February 13, 2024 and sell it today you would earn a total of  144,442  from holding Vaneck Vectors Semiconductor or generate 62.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

iShares Trust   vs.  Vaneck Vectors Semiconductor

iShares Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, IShares Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vaneck Vectors Semic

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vaneck Vectors Semiconductor are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical indicators, Vaneck Vectors may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with IShares Trust and Vaneck Vectors

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

The idea behind iShares Trust and Vaneck Vectors Semiconductor 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.