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 CNY, 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
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between IShares and IShares is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Aggregate and iShares China CNY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares China CNY 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 CNY 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 under-perform the IShares China. But the etf apears to be less risky and, when comparing its historical volatility, iShares Global Aggregate is 1.02 times less risky than IShares China. The etf trades about -0.26 of its potential returns per unit of risk. The iShares China CNY is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 560.00 in iShares China CNY on August 24, 2024 and sell it today you would earn a total of 3.00 from holding iShares China CNY or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global Aggregate vs. iShares China CNY
Performance |
| Timeline |
| iShares Global Aggregate |
| iShares China CNY |
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. iShares III Public | IShares Global vs. iShares Core MSCI | IShares Global vs. iShares France Govt | IShares Global vs. iShares Edge MSCI |
| IShares China vs. iShares III Public | IShares China vs. iShares Core MSCI | IShares China vs. iShares France Govt | IShares China vs. iShares Edge MSCI |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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