Correlation Between IShares AsiaPacific and Xtrackers FTSE
Can any of the company-specific risk be diversified away by investing in both IShares AsiaPacific and Xtrackers FTSE 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 AsiaPacific and Xtrackers FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares AsiaPacific Dividend and Xtrackers FTSE Developed, you can compare the effects of market volatilities on IShares AsiaPacific and Xtrackers FTSE 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 AsiaPacific with a short position of Xtrackers FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares AsiaPacific and Xtrackers FTSE.
Diversification Opportunities for IShares AsiaPacific and Xtrackers FTSE
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and Xtrackers is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding iShares AsiaPacific Dividend and Xtrackers FTSE Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers FTSE Developed and IShares AsiaPacific 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 AsiaPacific Dividend are associated (or correlated) with Xtrackers FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers FTSE Developed has no effect on the direction of IShares AsiaPacific i.e., IShares AsiaPacific and Xtrackers FTSE go up and down completely randomly.
Pair Corralation between IShares AsiaPacific and Xtrackers FTSE
Given the investment horizon of 90 days IShares AsiaPacific is expected to generate 1.23 times less return on investment than Xtrackers FTSE. In addition to that, IShares AsiaPacific is 1.24 times more volatile than Xtrackers FTSE Developed. It trades about 0.09 of its total potential returns per unit of risk. Xtrackers FTSE Developed is currently generating about 0.14 per unit of volatility. If you would invest 2,882 in Xtrackers FTSE Developed on September 14, 2024 and sell it today you would earn a total of 49.00 from holding Xtrackers FTSE Developed or generate 1.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares AsiaPacific Dividend vs. Xtrackers FTSE Developed
Performance |
| Timeline |
| iShares AsiaPacific |
| Xtrackers FTSE Developed |
IShares AsiaPacific and Xtrackers FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares AsiaPacific and Xtrackers FTSE
The main advantage of trading using opposite IShares AsiaPacific and Xtrackers FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares AsiaPacific position performs unexpectedly, Xtrackers FTSE 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 Xtrackers FTSE will offset losses from the drop in Xtrackers FTSE's long position.| IShares AsiaPacific vs. Freedom Day Dividend | IShares AsiaPacific vs. Franklin Templeton ETF | IShares AsiaPacific vs. iShares MSCI China | IShares AsiaPacific vs. Tidal Trust II |
| Xtrackers FTSE vs. Xtrackers Russell Multifactor | Xtrackers FTSE vs. Xtrackers MSCI All | Xtrackers FTSE vs. WisdomTree Dynamic Currency | Xtrackers FTSE vs. Xtrackers MSCI Eurozone |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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