Correlation Between ProShares MSCI and SmartETFs Asia
Can any of the company-specific risk be diversified away by investing in both ProShares MSCI and SmartETFs Asia 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 ProShares MSCI and SmartETFs Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares MSCI Emerging and SmartETFs Asia Pacific, you can compare the effects of market volatilities on ProShares MSCI and SmartETFs Asia 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 ProShares MSCI with a short position of SmartETFs Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares MSCI and SmartETFs Asia.
Diversification Opportunities for ProShares MSCI and SmartETFs Asia
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between ProShares and SmartETFs is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding ProShares MSCI Emerging and SmartETFs Asia Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartETFs Asia Pacific and ProShares MSCI 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 ProShares MSCI Emerging are associated (or correlated) with SmartETFs Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartETFs Asia Pacific has no effect on the direction of ProShares MSCI i.e., ProShares MSCI and SmartETFs Asia go up and down completely randomly.
Pair Corralation between ProShares MSCI and SmartETFs Asia
Given the investment horizon of 90 days ProShares MSCI is expected to generate 7.67 times less return on investment than SmartETFs Asia. But when comparing it to its historical volatility, ProShares MSCI Emerging is 1.23 times less risky than SmartETFs Asia. It trades about 0.02 of its potential returns per unit of risk. SmartETFs Asia Pacific is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,532 in SmartETFs Asia Pacific on November 4, 2024 and sell it today you would earn a total of 41.00 from holding SmartETFs Asia Pacific or generate 2.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares MSCI Emerging vs. SmartETFs Asia Pacific
Performance |
| Timeline |
| ProShares MSCI Emerging |
| SmartETFs Asia Pacific |
ProShares MSCI and SmartETFs Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares MSCI and SmartETFs Asia
The main advantage of trading using opposite ProShares MSCI and SmartETFs Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares MSCI position performs unexpectedly, SmartETFs Asia 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 Asia will offset losses from the drop in SmartETFs Asia's long position.| ProShares MSCI vs. ProShares MSCI EAFE | ProShares MSCI vs. ProShares MSCI Europe | ProShares MSCI vs. ProShares Russell 2000 | ProShares MSCI vs. ProShares SP MidCap |
| SmartETFs Asia vs. SmartETFs Dividend Builder | SmartETFs Asia vs. Anfield Dynamic Fixed | SmartETFs Asia vs. Anfield Universal Fixed | SmartETFs Asia vs. Aptus Drawdown Managed |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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