Correlation Between SmartETFs Asia and SmartETFs Dividend
Can any of the company-specific risk be diversified away by investing in both SmartETFs Asia and SmartETFs Dividend 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 SmartETFs Dividend 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 SmartETFs Dividend Builder, you can compare the effects of market volatilities on SmartETFs Asia and SmartETFs Dividend 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 SmartETFs Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of SmartETFs Asia and SmartETFs Dividend.
Diversification Opportunities for SmartETFs Asia and SmartETFs Dividend
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SmartETFs and SmartETFs is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding SmartETFs Asia Pacific and SmartETFs Dividend Builder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartETFs Dividend 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 SmartETFs Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartETFs Dividend has no effect on the direction of SmartETFs Asia i.e., SmartETFs Asia and SmartETFs Dividend go up and down completely randomly.
Pair Corralation between SmartETFs Asia and SmartETFs Dividend
Given the investment horizon of 90 days SmartETFs Asia Pacific is expected to generate 1.67 times more return on investment than SmartETFs Dividend. However, SmartETFs Asia is 1.67 times more volatile than SmartETFs Dividend Builder. It trades about 0.06 of its potential returns per unit of risk. SmartETFs Dividend Builder is currently generating about 0.09 per unit of risk. If you would invest 1,281 in SmartETFs Asia Pacific on August 28, 2024 and sell it today you would earn a total of 271.00 from holding SmartETFs Asia Pacific or generate 21.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SmartETFs Asia Pacific vs. SmartETFs Dividend Builder
Performance |
| Timeline |
| SmartETFs Asia Pacific |
| SmartETFs Dividend |
SmartETFs Asia and SmartETFs Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SmartETFs Asia and SmartETFs Dividend
The main advantage of trading using opposite SmartETFs Asia and SmartETFs Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SmartETFs Asia position performs unexpectedly, SmartETFs Dividend 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 SmartETFs Dividend will offset losses from the drop in SmartETFs Dividend's long position.| SmartETFs Asia vs. Matthews China Active | SmartETFs Asia vs. MAYBANK EMERGING ETF | SmartETFs Asia vs. Matthews Emerging Markets | SmartETFs Asia vs. JP Morgan Exchange Traded |
| SmartETFs Dividend vs. iShares MSCI Emerging | SmartETFs Dividend vs. BMO Long Federal | SmartETFs Dividend vs. iShares MSCI EAFE | SmartETFs Dividend vs. Vanguard Total Market |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |