Correlation Between IShares AsiaPacific and SmartETFs Dividend
Can any of the company-specific risk be diversified away by investing in both IShares AsiaPacific and SmartETFs Dividend 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 SmartETFs Dividend 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 SmartETFs Dividend Builder, you can compare the effects of market volatilities on IShares AsiaPacific and SmartETFs Dividend 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 SmartETFs Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares AsiaPacific and SmartETFs Dividend.
Diversification Opportunities for IShares AsiaPacific and SmartETFs Dividend
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and SmartETFs is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding iShares AsiaPacific Dividend and SmartETFs Dividend Builder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartETFs Dividend 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 SmartETFs Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartETFs Dividend has no effect on the direction of IShares AsiaPacific i.e., IShares AsiaPacific and SmartETFs Dividend go up and down completely randomly.
Pair Corralation between IShares AsiaPacific and SmartETFs Dividend
Given the investment horizon of 90 days iShares AsiaPacific Dividend is expected to generate 1.46 times more return on investment than SmartETFs Dividend. However, IShares AsiaPacific is 1.46 times more volatile than SmartETFs Dividend Builder. It trades about 0.07 of its potential returns per unit of risk. SmartETFs Dividend Builder is currently generating about 0.09 per unit of risk. If you would invest 3,051 in iShares AsiaPacific Dividend on August 28, 2024 and sell it today you would earn a total of 673.00 from holding iShares AsiaPacific Dividend or generate 22.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.72% |
| Values | Daily Returns |
iShares AsiaPacific Dividend vs. SmartETFs Dividend Builder
Performance |
| Timeline |
| iShares AsiaPacific |
| SmartETFs Dividend |
IShares AsiaPacific and SmartETFs Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares AsiaPacific and SmartETFs Dividend
The main advantage of trading using opposite IShares AsiaPacific and SmartETFs Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares AsiaPacific position performs unexpectedly, SmartETFs Dividend 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 SmartETFs Dividend will offset losses from the drop in SmartETFs Dividend's long position.| IShares AsiaPacific vs. Matthews China Active | IShares AsiaPacific vs. MAYBANK EMERGING ETF | IShares AsiaPacific vs. Matthews Emerging Markets | IShares AsiaPacific vs. JP Morgan Exchange Traded |
| SmartETFs Dividend vs. iShares MSCI Emerging | SmartETFs Dividend vs. BMO Long Federal | SmartETFs Dividend vs. iShares MSCI EAFE | SmartETFs Dividend vs. Vanguard Total Market |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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