Correlation Between SmartETFs Asia and IShares
Can any of the company-specific risk be diversified away by investing in both SmartETFs Asia and IShares 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 SmartETFs Asia and IShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SmartETFs Asia Pacific and IShares, you can compare the effects of market volatilities on SmartETFs Asia and IShares 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 SmartETFs Asia with a short position of IShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of SmartETFs Asia and IShares.
Diversification Opportunities for SmartETFs Asia and IShares
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SmartETFs and IShares is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding SmartETFs Asia Pacific and IShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares and SmartETFs Asia 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 SmartETFs Asia Pacific are associated (or correlated) with IShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares has no effect on the direction of SmartETFs Asia i.e., SmartETFs Asia and IShares go up and down completely randomly.
Pair Corralation between SmartETFs Asia and IShares
If you would invest 2,071 in IShares on September 4, 2024 and sell it today you would earn a total of 0.00 from holding IShares or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
SmartETFs Asia Pacific vs. IShares
Performance |
| Timeline |
| SmartETFs Asia Pacific |
| IShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SmartETFs Asia and IShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SmartETFs Asia and IShares
The main advantage of trading using opposite SmartETFs Asia and IShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SmartETFs Asia position performs unexpectedly, IShares 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 will offset losses from the drop in IShares' long position.| SmartETFs Asia vs. SmartETFs Dividend Builder | SmartETFs Asia vs. Anfield Dynamic Fixed | SmartETFs Asia vs. Anfield Universal Fixed | SmartETFs Asia vs. Aptus Drawdown Managed |
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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