Correlation Between IShares AsiaPacific and FlexShares International
Can any of the company-specific risk be diversified away by investing in both IShares AsiaPacific and FlexShares 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 FlexShares 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 FlexShares International Quality, you can compare the effects of market volatilities on IShares AsiaPacific and FlexShares 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 FlexShares International. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares AsiaPacific and FlexShares International.
Diversification Opportunities for IShares AsiaPacific and FlexShares International
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and FlexShares is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding iShares AsiaPacific Dividend and FlexShares International Quali in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShares 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 FlexShares International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShares International has no effect on the direction of IShares AsiaPacific i.e., IShares AsiaPacific and FlexShares International go up and down completely randomly.
Pair Corralation between IShares AsiaPacific and FlexShares International
Given the investment horizon of 90 days iShares AsiaPacific Dividend is expected to generate 1.07 times more return on investment than FlexShares International. However, IShares AsiaPacific is 1.07 times more volatile than FlexShares International Quality. It trades about 0.06 of its potential returns per unit of risk. FlexShares International Quality is currently generating about 0.06 per unit of risk. If you would invest 3,298 in iShares AsiaPacific Dividend on September 12, 2024 and sell it today you would earn a total of 454.42 from holding iShares AsiaPacific Dividend or generate 13.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares AsiaPacific Dividend vs. FlexShares International Quali
Performance |
| Timeline |
| iShares AsiaPacific |
| FlexShares International |
IShares AsiaPacific and FlexShares International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares AsiaPacific and FlexShares International
The main advantage of trading using opposite IShares AsiaPacific and FlexShares International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares AsiaPacific position performs unexpectedly, FlexShares 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 FlexShares International will offset losses from the drop in FlexShares 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 |
| FlexShares International vs. Global X MSCI | FlexShares International vs. Global X Alternative | FlexShares International vs. First Trust Intl | FlexShares International vs. iShares AsiaPacific Dividend |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |