Correlation Between IShares MSCI and VanEck ChiNext
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and VanEck ChiNext 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 MSCI and VanEck ChiNext into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI China and VanEck ChiNext ETF, you can compare the effects of market volatilities on IShares MSCI and VanEck ChiNext 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 MSCI with a short position of VanEck ChiNext. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and VanEck ChiNext.
Diversification Opportunities for IShares MSCI and VanEck ChiNext
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and VanEck is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI China and VanEck ChiNext ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck ChiNext ETF and IShares MSCI 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 MSCI China are associated (or correlated) with VanEck ChiNext. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck ChiNext ETF has no effect on the direction of IShares MSCI i.e., IShares MSCI and VanEck ChiNext go up and down completely randomly.
Pair Corralation between IShares MSCI and VanEck ChiNext
Given the investment horizon of 90 days iShares MSCI China is expected to generate 0.61 times more return on investment than VanEck ChiNext. However, iShares MSCI China is 1.63 times less risky than VanEck ChiNext. It trades about -0.1 of its potential returns per unit of risk. VanEck ChiNext ETF is currently generating about -0.06 per unit of risk. If you would invest 2,971 in iShares MSCI China on August 29, 2024 and sell it today you would lose (156.00) from holding iShares MSCI China or give up 5.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI China vs. VanEck ChiNext ETF
Performance |
| Timeline |
| iShares MSCI China |
| VanEck ChiNext ETF |
IShares MSCI and VanEck ChiNext Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and VanEck ChiNext
The main advantage of trading using opposite IShares MSCI and VanEck ChiNext positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, VanEck ChiNext 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 VanEck ChiNext will offset losses from the drop in VanEck ChiNext's long position.| IShares MSCI vs. iShares MSCI Singapore | IShares MSCI vs. iShares MSCI Malaysia | IShares MSCI vs. iShares MSCI Australia | IShares MSCI vs. iShares MSCI South |
| VanEck ChiNext vs. Freedom Day Dividend | VanEck ChiNext vs. Davis Select International | VanEck ChiNext vs. iShares MSCI China | VanEck ChiNext vs. SmartETFs Dividend Builder |
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 Stocks Directory module to find actively traded stocks across global markets.
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