Correlation Between VanEck ChiNext and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both VanEck ChiNext and IShares MSCI 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 VanEck ChiNext and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck ChiNext ETF and iShares MSCI Frontier, you can compare the effects of market volatilities on VanEck ChiNext and IShares MSCI 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 VanEck ChiNext with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck ChiNext and IShares MSCI.
Diversification Opportunities for VanEck ChiNext and IShares MSCI
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VanEck and IShares is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding VanEck ChiNext ETF and iShares MSCI Frontier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Frontier and VanEck ChiNext 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 VanEck ChiNext ETF are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI Frontier has no effect on the direction of VanEck ChiNext i.e., VanEck ChiNext and IShares MSCI go up and down completely randomly.
Pair Corralation between VanEck ChiNext and IShares MSCI
Given the investment horizon of 90 days VanEck ChiNext ETF is expected to generate 15.01 times more return on investment than IShares MSCI. However, VanEck ChiNext is 15.01 times more volatile than iShares MSCI Frontier. It trades about 0.04 of its potential returns per unit of risk. iShares MSCI Frontier is currently generating about -0.03 per unit of risk. If you would invest 2,889 in VanEck ChiNext ETF on September 1, 2024 and sell it today you would earn a total of 63.00 from holding VanEck ChiNext ETF or generate 2.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
VanEck ChiNext ETF vs. iShares MSCI Frontier
Performance |
| Timeline |
| VanEck ChiNext ETF |
| iShares MSCI Frontier |
VanEck ChiNext and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck ChiNext and IShares MSCI
The main advantage of trading using opposite VanEck ChiNext and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck ChiNext position performs unexpectedly, IShares MSCI 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 MSCI will offset losses from the drop in IShares MSCI's long position.| VanEck ChiNext vs. FT Vest Equity | VanEck ChiNext vs. Northern Lights | VanEck ChiNext vs. Dimensional International High | VanEck ChiNext vs. Matthews China Discovery |
| IShares MSCI vs. Xtrackers MSCI Emerging | IShares MSCI vs. FlexShares Morningstar Emerging | IShares MSCI vs. First Trust Emerging |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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