Correlation Between IShares China and VanEck Global
Can any of the company-specific risk be diversified away by investing in both IShares China and VanEck Global 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 Global 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 Global Real, you can compare the effects of market volatilities on IShares China and VanEck Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares China and VanEck Global.
Diversification Opportunities for IShares China and VanEck Global
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and VanEck is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding iShares China CNY and VanEck Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Global Real 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Global Real has no effect on the direction of IShares China i.e., IShares China and VanEck Global go up and down completely randomly.
Pair Corralation between IShares China and VanEck Global
Assuming the 90 days trading horizon IShares China is expected to generate 4.49 times less return on investment than VanEck Global. But when comparing it to its historical volatility, iShares China CNY is 4.82 times less risky than VanEck Global. It trades about 0.25 of its potential returns per unit of risk. VanEck Global Real is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 4,017 in VanEck Global Real on August 31, 2024 and sell it today you would earn a total of 161.00 from holding VanEck Global Real or generate 4.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares China CNY vs. VanEck Global Real
Performance |
| Timeline |
| iShares China CNY |
| VanEck Global Real |
IShares China and VanEck Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares China and VanEck Global
The main advantage of trading using opposite IShares China and VanEck Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares China position performs unexpectedly, VanEck Global 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 Global will offset losses from the drop in VanEck Global's long position.| IShares China vs. iShares Core MSCI | IShares China vs. Vanguard FTSE All World | IShares China vs. BlackRock ESG Multi Asset | IShares China vs. Pershing Square Holdings |
| VanEck Global vs. iShares Core MSCI | VanEck Global vs. Vanguard FTSE All World | VanEck Global vs. BlackRock ESG Multi Asset | VanEck Global vs. Pershing Square Holdings |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |