Correlation Between IShares II and IShares Euro
Can any of the company-specific risk be diversified away by investing in both IShares II and IShares Euro 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 II and IShares Euro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares II Public and iShares Euro Dividend, you can compare the effects of market volatilities on IShares II and IShares Euro 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 II with a short position of IShares Euro. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares II and IShares Euro.
Diversification Opportunities for IShares II and IShares Euro
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and IShares is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding iShares II Public and iShares Euro Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Euro Dividend and IShares II 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 II Public are associated (or correlated) with IShares Euro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Euro Dividend has no effect on the direction of IShares II i.e., IShares II and IShares Euro go up and down completely randomly.
Pair Corralation between IShares II and IShares Euro
Assuming the 90 days trading horizon iShares II Public is expected to generate 0.53 times more return on investment than IShares Euro. However, iShares II Public is 1.89 times less risky than IShares Euro. It trades about 0.32 of its potential returns per unit of risk. iShares Euro Dividend is currently generating about 0.08 per unit of risk. If you would invest 15,956 in iShares II Public on September 12, 2024 and sell it today you would earn a total of 410.00 from holding iShares II Public or generate 2.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
iShares II Public vs. iShares Euro Dividend
Performance |
| Timeline |
| iShares II Public |
| iShares Euro Dividend |
IShares II and IShares Euro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares II and IShares Euro
The main advantage of trading using opposite IShares II and IShares Euro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares II position performs unexpectedly, IShares Euro 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 Euro will offset losses from the drop in IShares Euro's long position.| IShares II vs. iShares III Public | IShares II vs. iShares Core MSCI | IShares II vs. iShares France Govt | IShares II vs. iShares Edge MSCI |
| IShares Euro vs. SPDR Dow Jones | IShares Euro vs. iShares Core MSCI | IShares Euro vs. iShares SP 500 | IShares Euro vs. Vanguard FTSE All World |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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