Correlation Between IShares Intl and VanEck International
Can any of the company-specific risk be diversified away by investing in both IShares Intl and VanEck 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 Intl and VanEck International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Intl High and VanEck International High, you can compare the effects of market volatilities on IShares Intl and VanEck 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 Intl with a short position of VanEck International. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Intl and VanEck International.
Diversification Opportunities for IShares Intl and VanEck International
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and VanEck is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding iShares Intl High and VanEck International High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck International High and IShares Intl 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 Intl High are associated (or correlated) with VanEck International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck International High has no effect on the direction of IShares Intl i.e., IShares Intl and VanEck International go up and down completely randomly.
Pair Corralation between IShares Intl and VanEck International
Given the investment horizon of 90 days iShares Intl High is expected to generate 0.96 times more return on investment than VanEck International. However, iShares Intl High is 1.04 times less risky than VanEck International. It trades about 0.03 of its potential returns per unit of risk. VanEck International High is currently generating about -0.05 per unit of risk. If you would invest 4,455 in iShares Intl High on August 28, 2024 and sell it today you would earn a total of 23.00 from holding iShares Intl High or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Intl High vs. VanEck International High
Performance |
| Timeline |
| iShares Intl High |
| VanEck International High |
IShares Intl and VanEck International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Intl and VanEck International
The main advantage of trading using opposite IShares Intl and VanEck International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Intl position performs unexpectedly, VanEck 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 VanEck International will offset losses from the drop in VanEck International's long position.| IShares Intl vs. First Trust Senior | IShares Intl vs. First Trust Low | IShares Intl vs. First Trust Enhanced | IShares Intl vs. First Trust TCW |
| VanEck International vs. First Trust Senior | VanEck International vs. First Trust Low | VanEck International vs. First Trust Enhanced | VanEck International vs. First Trust TCW |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |