Correlation Between IShares Emerging and IShares Asia
Can any of the company-specific risk be diversified away by investing in both IShares Emerging and IShares Asia 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 Emerging and IShares Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Emerging Asia and iShares Asia Property, you can compare the effects of market volatilities on IShares Emerging and IShares Asia 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 Emerging with a short position of IShares Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Emerging and IShares Asia.
Diversification Opportunities for IShares Emerging and IShares Asia
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between IShares and IShares is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding iShares Emerging Asia and iShares Asia Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Asia Property and IShares Emerging 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 Emerging Asia are associated (or correlated) with IShares Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Asia Property has no effect on the direction of IShares Emerging i.e., IShares Emerging and IShares Asia go up and down completely randomly.
Pair Corralation between IShares Emerging and IShares Asia
Assuming the 90 days trading horizon iShares Emerging Asia is expected to under-perform the IShares Asia. But the etf apears to be less risky and, when comparing its historical volatility, iShares Emerging Asia is 4.8 times less risky than IShares Asia. The etf trades about -0.26 of its potential returns per unit of risk. The iShares Asia Property is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,899 in iShares Asia Property on December 2, 2024 and sell it today you would earn a total of 23.00 from holding iShares Asia Property or generate 1.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.45% |
Values | Daily Returns |
iShares Emerging Asia vs. iShares Asia Property
Performance |
Timeline |
iShares Emerging Asia |
iShares Asia Property |
IShares Emerging and IShares Asia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares Emerging and IShares Asia
The main advantage of trading using opposite IShares Emerging and IShares Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Emerging position performs unexpectedly, IShares Asia 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 IShares Asia will offset losses from the drop in IShares Asia's long position.IShares Emerging vs. iShares Corp Bond | IShares Emerging vs. iShares MSCI Global | IShares Emerging vs. iShares VII PLC | IShares Emerging vs. iShares Asia Property |
IShares Asia vs. iShares Corp Bond | IShares Asia vs. iShares Emerging Asia | IShares Asia vs. iShares MSCI Global | IShares Asia vs. iShares VII PLC |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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