Correlation Between IShares AsiaPacific and IShares International
Can any of the company-specific risk be diversified away by investing in both IShares AsiaPacific and IShares International 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 IShares International 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 iShares International Select, you can compare the effects of market volatilities on IShares AsiaPacific and IShares International 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 IShares International. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares AsiaPacific and IShares International.
Diversification Opportunities for IShares AsiaPacific and IShares International
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and IShares is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding iShares AsiaPacific Dividend and iShares International Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares International 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 IShares International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares International has no effect on the direction of IShares AsiaPacific i.e., IShares AsiaPacific and IShares International go up and down completely randomly.
Pair Corralation between IShares AsiaPacific and IShares International
Given the investment horizon of 90 days iShares AsiaPacific Dividend is expected to generate 1.03 times more return on investment than IShares International. However, IShares AsiaPacific is 1.03 times more volatile than iShares International Select. It trades about -0.05 of its potential returns per unit of risk. iShares International Select is currently generating about -0.09 per unit of risk. If you would invest 3,829 in iShares AsiaPacific Dividend on September 13, 2024 and sell it today you would lose (73.00) from holding iShares AsiaPacific Dividend or give up 1.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
iShares AsiaPacific Dividend vs. iShares International Select
Performance |
| Timeline |
| iShares AsiaPacific |
| iShares International |
IShares AsiaPacific and IShares International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares AsiaPacific and IShares International
The main advantage of trading using opposite IShares AsiaPacific and IShares International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares AsiaPacific position performs unexpectedly, IShares International 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 IShares International will offset losses from the drop in IShares International'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 |
| IShares International vs. iShares Core High | IShares International vs. SPDR SP International | IShares International vs. iShares Select Dividend | IShares International vs. iShares Emerging Markets |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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