Correlation Between ProShares MSCI and IShares AsiaPacific
Can any of the company-specific risk be diversified away by investing in both ProShares MSCI and IShares AsiaPacific 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 IShares AsiaPacific 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 iShares AsiaPacific Dividend, you can compare the effects of market volatilities on ProShares MSCI and IShares AsiaPacific 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 IShares AsiaPacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares MSCI and IShares AsiaPacific.
Diversification Opportunities for ProShares MSCI and IShares AsiaPacific
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and IShares is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding ProShares MSCI Emerging and iShares AsiaPacific Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares AsiaPacific 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 IShares AsiaPacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares AsiaPacific has no effect on the direction of ProShares MSCI i.e., ProShares MSCI and IShares AsiaPacific go up and down completely randomly.
Pair Corralation between ProShares MSCI and IShares AsiaPacific
Given the investment horizon of 90 days ProShares MSCI is expected to generate 3.32 times less return on investment than IShares AsiaPacific. In addition to that, ProShares MSCI is 1.13 times more volatile than iShares AsiaPacific Dividend. It trades about 0.02 of its total potential returns per unit of risk. iShares AsiaPacific Dividend is currently generating about 0.09 per unit of volatility. If you would invest 3,593 in iShares AsiaPacific Dividend on November 4, 2024 and sell it today you would earn a total of 41.00 from holding iShares AsiaPacific Dividend or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares MSCI Emerging vs. iShares AsiaPacific Dividend
Performance |
| Timeline |
| ProShares MSCI Emerging |
| iShares AsiaPacific |
ProShares MSCI and IShares AsiaPacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares MSCI and IShares AsiaPacific
The main advantage of trading using opposite ProShares MSCI and IShares AsiaPacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares MSCI position performs unexpectedly, IShares AsiaPacific 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 AsiaPacific will offset losses from the drop in IShares AsiaPacific'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 |
| IShares AsiaPacific vs. Franklin Templeton ETF | IShares AsiaPacific vs. Altrius Global Dividend | IShares AsiaPacific vs. Invesco Exchange Traded | IShares AsiaPacific vs. Franklin International Core |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |