Correlation Between VanEck AEX and SPDR MSCI

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

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

Diversification Opportunities for VanEck AEX and SPDR MSCI

0.93

Correlation Coefficient

VanEck AEX  SPDR MSCI

Almost no diversification

The 3 months correlation between VanEck and SPDR is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding VanEck AEX UCITS and SPDR MSCI World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI World and VanEck 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 VanEck AEX UCITS are associated (or correlated) with SPDR MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI World has no effect on the direction of VanEck AEX i.e., VanEck AEX and SPDR MSCI go up and down completely randomly.

Pair Corralation between VanEck AEX and SPDR MSCI

Assuming the 90 days trading horizon VanEck AEX is expected to generate 1.64 times less return on investment than SPDR MSCI. But when comparing it to its historical volatility, VanEck AEX UCITS is 1.13 times less risky than SPDR MSCI. It trades about 0.15 of its potential returns per unit of risk. SPDR MSCI World is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  6,524  in SPDR MSCI World on April 22, 2025 and sell it today you would earn a total of  822.00  from holding SPDR MSCI World or generate 12.6% return on investment over 90 days.

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

VanEck AEX UCITS  vs.  SPDR MSCI World

VanEck AEX UCITS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck AEX UCITS are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, VanEck AEX may actually be approaching a critical reversion point that can send shares even higher in August 2025.

SPDR MSCI World

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR MSCI World are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SPDR MSCI may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with VanEck AEX and SPDR MSCI

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

The idea behind VanEck AEX UCITS and SPDR MSCI World 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.