Correlation Between IShares Global and IShares China
Can any of the company-specific risk be diversified away by investing in both IShares Global and IShares China 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 Global and IShares China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Global Aggregate and iShares China LargeCap, you can compare the effects of market volatilities on IShares Global and IShares China 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 Global with a short position of IShares China. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and IShares China.
Diversification Opportunities for IShares Global and IShares China
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and IShares is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Aggregate and iShares China LargeCap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares China LargeCap and IShares Global 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 Global Aggregate are associated (or correlated) with IShares China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares China LargeCap has no effect on the direction of IShares Global i.e., IShares Global and IShares China go up and down completely randomly.
Pair Corralation between IShares Global and IShares China
Assuming the 90 days trading horizon iShares Global Aggregate is expected to generate 0.1 times more return on investment than IShares China. However, iShares Global Aggregate is 10.1 times less risky than IShares China. It trades about -0.1 of its potential returns per unit of risk. iShares China LargeCap is currently generating about -0.04 per unit of risk. If you would invest 9,811 in iShares Global Aggregate on August 29, 2024 and sell it today you would lose (102.00) from holding iShares Global Aggregate or give up 1.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global Aggregate vs. iShares China LargeCap
Performance |
| Timeline |
| iShares Global Aggregate |
| iShares China LargeCap |
IShares Global and IShares China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and IShares China
The main advantage of trading using opposite IShares Global and IShares China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, IShares China 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 China will offset losses from the drop in IShares China's long position.| IShares Global vs. BetaShares Geared Australian | IShares Global vs. BetaShares Global Robotics | IShares Global vs. iShares China LargeCap | IShares Global vs. Russell Australian Government |
| IShares China vs. iShares MSCI Emerging | IShares China vs. iShares Global Aggregate | IShares China vs. iShares CoreSP MidCap | IShares China vs. iShares SP 500 |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |