Correlation Between SPASX Dividend and IShares Asia
Can any of the company-specific risk be diversified away by investing in both SPASX Dividend 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 SPASX Dividend and IShares Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPASX Dividend Opportunities and iShares Asia 50, you can compare the effects of market volatilities on SPASX Dividend 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 SPASX Dividend with a short position of IShares Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPASX Dividend and IShares Asia.
Diversification Opportunities for SPASX Dividend and IShares Asia
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SPASX and IShares is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding SPASX Dividend Opportunities and iShares Asia 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Asia 50 and SPASX Dividend 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 SPASX Dividend Opportunities 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 50 has no effect on the direction of SPASX Dividend i.e., SPASX Dividend and IShares Asia go up and down completely randomly.
Pair Corralation between SPASX Dividend and IShares Asia
Assuming the 90 days trading horizon SPASX Dividend is expected to generate 2.18 times less return on investment than IShares Asia. But when comparing it to its historical volatility, SPASX Dividend Opportunities is 1.66 times less risky than IShares Asia. It trades about 0.05 of its potential returns per unit of risk. iShares Asia 50 is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8,684 in iShares Asia 50 on September 1, 2024 and sell it today you would earn a total of 1,807 from holding iShares Asia 50 or generate 20.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
SPASX Dividend Opportunities vs. iShares Asia 50
Performance |
| Timeline |
SPASX Dividend and IShares Asia Volatility Contrast
Predicted Return Density |
| Returns |
SPASX Dividend Opportunities
Pair trading matchups for SPASX Dividend
iShares Asia 50
Pair trading matchups for IShares Asia
Pair Trading with SPASX Dividend and IShares Asia
The main advantage of trading using opposite SPASX Dividend and IShares Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPASX Dividend 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.| SPASX Dividend vs. BKI Investment | SPASX Dividend vs. Diversified United Investment | SPASX Dividend vs. Ainsworth Game Technology | SPASX Dividend vs. Bio Gene Technology |
| IShares Asia vs. iShares MSCI Emerging | IShares Asia vs. iShares Global Aggregate | IShares Asia vs. iShares CoreSP MidCap | IShares Asia 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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