Correlation Between IShares Currency and VictoryShares International
Can any of the company-specific risk be diversified away by investing in both IShares Currency and VictoryShares 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 Currency and VictoryShares International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Currency Hedged and VictoryShares International Volatility, you can compare the effects of market volatilities on IShares Currency and VictoryShares 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 Currency with a short position of VictoryShares International. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Currency and VictoryShares International.
Diversification Opportunities for IShares Currency and VictoryShares International
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IShares and VictoryShares is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding iShares Currency Hedged and VictoryShares International Vo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VictoryShares International and IShares Currency 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 Currency Hedged are associated (or correlated) with VictoryShares International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VictoryShares International has no effect on the direction of IShares Currency i.e., IShares Currency and VictoryShares International go up and down completely randomly.
Pair Corralation between IShares Currency and VictoryShares International
Given the investment horizon of 90 days iShares Currency Hedged is expected to generate 0.95 times more return on investment than VictoryShares International. However, iShares Currency Hedged is 1.06 times less risky than VictoryShares International. It trades about 0.07 of its potential returns per unit of risk. VictoryShares International Volatility is currently generating about 0.04 per unit of risk. If you would invest 2,760 in iShares Currency Hedged on September 12, 2024 and sell it today you would earn a total of 507.00 from holding iShares Currency Hedged or generate 18.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.3% |
| Values | Daily Returns |
iShares Currency Hedged vs. VictoryShares International Vo
Performance |
| Timeline |
| iShares Currency Hedged |
| VictoryShares International |
IShares Currency and VictoryShares International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Currency and VictoryShares International
The main advantage of trading using opposite IShares Currency and VictoryShares International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Currency position performs unexpectedly, VictoryShares 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 VictoryShares International will offset losses from the drop in VictoryShares International's long position.| IShares Currency vs. iShares MSCI Intl | IShares Currency vs. iShares Currency Hedged | IShares Currency vs. HUMANA INC | IShares Currency vs. Aquagold International |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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