Correlation Between IShares AsiaPacific and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both IShares AsiaPacific and SPDR MSCI 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 SPDR MSCI 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 SPDR MSCI World, you can compare the effects of market volatilities on IShares AsiaPacific and SPDR MSCI 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 SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares AsiaPacific and SPDR MSCI.
Diversification Opportunities for IShares AsiaPacific and SPDR MSCI
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and SPDR is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding iShares AsiaPacific Dividend and SPDR MSCI World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI World 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 SPDR MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI World has no effect on the direction of IShares AsiaPacific i.e., IShares AsiaPacific and SPDR MSCI go up and down completely randomly.
Pair Corralation between IShares AsiaPacific and SPDR MSCI
Given the investment horizon of 90 days IShares AsiaPacific is expected to generate 1.53 times less return on investment than SPDR MSCI. In addition to that, IShares AsiaPacific is 1.43 times more volatile than SPDR MSCI World. It trades about 0.05 of its total potential returns per unit of risk. SPDR MSCI World is currently generating about 0.1 per unit of volatility. If you would invest 12,025 in SPDR MSCI World on September 3, 2024 and sell it today you would earn a total of 991.00 from holding SPDR MSCI World or generate 8.24% 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. SPDR MSCI World
Performance |
| Timeline |
| iShares AsiaPacific |
| SPDR MSCI World |
IShares AsiaPacific and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares AsiaPacific and SPDR MSCI
The main advantage of trading using opposite IShares AsiaPacific and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares AsiaPacific position performs unexpectedly, SPDR MSCI 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 SPDR MSCI will offset losses from the drop in SPDR MSCI's long position.| IShares AsiaPacific vs. JPMorgan BetaBuilders Developed | IShares AsiaPacific vs. iShares MSCI All | IShares AsiaPacific vs. iShares MSCI Pacific | IShares AsiaPacific vs. iShares Asia 50 |
| SPDR MSCI vs. SmartETFs Asia Pacific | SPDR MSCI vs. Listed Funds Trust | SPDR MSCI vs. iShares AsiaPacific Dividend | SPDR MSCI vs. ProShares MSCI Emerging |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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