Correlation Between IShares China and VanEck Multi
Can any of the company-specific risk be diversified away by investing in both IShares China and VanEck Multi 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 China and VanEck Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares China CNY and VanEck Multi Asset Balanced, you can compare the effects of market volatilities on IShares China and VanEck Multi 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 China with a short position of VanEck Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares China and VanEck Multi.
Diversification Opportunities for IShares China and VanEck Multi
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and VanEck is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding iShares China CNY and VanEck Multi Asset Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Multi Asset and IShares China 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 China CNY are associated (or correlated) with VanEck Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Multi Asset has no effect on the direction of IShares China i.e., IShares China and VanEck Multi go up and down completely randomly.
Pair Corralation between IShares China and VanEck Multi
Assuming the 90 days trading horizon iShares China CNY is expected to under-perform the VanEck Multi. But the etf apears to be less risky and, when comparing its historical volatility, iShares China CNY is 1.03 times less risky than VanEck Multi. The etf trades about -0.13 of its potential returns per unit of risk. The VanEck Multi Asset Balanced is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 6,996 in VanEck Multi Asset Balanced on September 3, 2024 and sell it today you would earn a total of 244.00 from holding VanEck Multi Asset Balanced or generate 3.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares China CNY vs. VanEck Multi Asset Balanced
Performance |
| Timeline |
| iShares China CNY |
| VanEck Multi Asset |
IShares China and VanEck Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares China and VanEck Multi
The main advantage of trading using opposite IShares China and VanEck Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares China position performs unexpectedly, VanEck Multi 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 Multi will offset losses from the drop in VanEck Multi's long position.| IShares China vs. iShares China CNY | IShares China vs. iShares Core FTSE | IShares China vs. iShares MSCI EM | IShares China vs. iShares MSCI China |
| VanEck Multi vs. Vanguard FTSE Developed | VanEck Multi vs. HSBC MSCI Japan | VanEck Multi vs. iShares II Public | VanEck Multi vs. Hydratec Industries NV |
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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