Correlation Between IShares AEX and VanEck Multi

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

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

Diversification Opportunities for IShares AEX and VanEck Multi

0.87

Correlation Coefficient

IShares AEX  VanEck Multi

Very poor diversification

The 3 months correlation between IShares and VanEck is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding iShares AEX UCITS and VanEck Multi Asset Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Multi Asset and IShares AEX 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 AEX 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 IShares AEX i.e., IShares AEX and VanEck Multi go up and down completely randomly.

Pair Corralation between IShares AEX and VanEck Multi

Assuming the 90 days trading horizon iShares AEX UCITS is expected to generate 1.8 times more return on investment than VanEck Multi. However, IShares AEX is 1.8 times more volatile than VanEck Multi Asset Balanced. It trades about 0.05 of its potential returns per unit of risk. VanEck Multi Asset Balanced is currently generating about 0.08 per unit of risk. If you would invest  7,365  in iShares AEX UCITS on April 24, 2025 and sell it today you would earn a total of  1,626  from holding iShares AEX UCITS or generate 22.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.4%
Values	Daily Returns

iShares AEX UCITS  vs.  VanEck Multi Asset Balanced

iShares AEX UCITS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares AEX UCITS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, IShares AEX 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

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Multi Asset Balanced are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. 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 IShares AEX and VanEck Multi

The main advantage of trading using opposite IShares AEX and VanEck Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares AEX 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 iShares AEX UCITS and VanEck Multi Asset Balanced 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.