Correlation Between Xtrackers MSCI and IShares AsiaPacific
Can any of the company-specific risk be diversified away by investing in both Xtrackers 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 Xtrackers 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 Xtrackers MSCI EAFE and iShares AsiaPacific Dividend, you can compare the effects of market volatilities on Xtrackers 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 Xtrackers MSCI with a short position of IShares AsiaPacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers MSCI and IShares AsiaPacific.
Diversification Opportunities for Xtrackers MSCI and IShares AsiaPacific
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xtrackers and IShares is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI EAFE and iShares AsiaPacific Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares AsiaPacific and Xtrackers 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 Xtrackers MSCI EAFE 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 Xtrackers MSCI i.e., Xtrackers MSCI and IShares AsiaPacific go up and down completely randomly.
Pair Corralation between Xtrackers MSCI and IShares AsiaPacific
Given the investment horizon of 90 days Xtrackers MSCI EAFE is expected to under-perform the IShares AsiaPacific. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers MSCI EAFE is 1.08 times less risky than IShares AsiaPacific. The etf trades about -0.21 of its potential returns per unit of risk. The iShares AsiaPacific Dividend is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 3,763 in iShares AsiaPacific Dividend on August 27, 2024 and sell it today you would lose (39.00) from holding iShares AsiaPacific Dividend or give up 1.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers MSCI EAFE vs. iShares AsiaPacific Dividend
Performance |
| Timeline |
| Xtrackers MSCI EAFE |
| iShares AsiaPacific |
Xtrackers MSCI and IShares AsiaPacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers MSCI and IShares AsiaPacific
The main advantage of trading using opposite Xtrackers MSCI and IShares AsiaPacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers 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.| Xtrackers MSCI vs. Fidelity International High | Xtrackers MSCI vs. Global X MSCI | Xtrackers MSCI vs. Xtrackers USD High | Xtrackers MSCI vs. First Trust Dow |
| IShares AsiaPacific vs. Matthews China Active | IShares AsiaPacific vs. MAYBANK EMERGING ETF | IShares AsiaPacific vs. Matthews Emerging Markets | IShares AsiaPacific vs. JP Morgan Exchange Traded |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |