Correlation Between VanEck Emerging and IShares Intl
Can any of the company-specific risk be diversified away by investing in both VanEck Emerging and IShares Intl 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 VanEck Emerging and IShares Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Emerging Markets and iShares Intl High, you can compare the effects of market volatilities on VanEck Emerging and IShares Intl 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 VanEck Emerging with a short position of IShares Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Emerging and IShares Intl.
Diversification Opportunities for VanEck Emerging and IShares Intl
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VanEck and IShares is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Emerging Markets and iShares Intl High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Intl High and VanEck Emerging 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 VanEck Emerging Markets are associated (or correlated) with IShares Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Intl High has no effect on the direction of VanEck Emerging i.e., VanEck Emerging and IShares Intl go up and down completely randomly.
Pair Corralation between VanEck Emerging and IShares Intl
Given the investment horizon of 90 days VanEck Emerging Markets is expected to generate 0.91 times more return on investment than IShares Intl. However, VanEck Emerging Markets is 1.1 times less risky than IShares Intl. It trades about 0.11 of its potential returns per unit of risk. iShares Intl High is currently generating about 0.09 per unit of risk. If you would invest 1,590 in VanEck Emerging Markets on August 26, 2024 and sell it today you would earn a total of 367.00 from holding VanEck Emerging Markets or generate 23.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Emerging Markets vs. iShares Intl High
Performance |
| Timeline |
| VanEck Emerging Markets |
| iShares Intl High |
VanEck Emerging and IShares Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Emerging and IShares Intl
The main advantage of trading using opposite VanEck Emerging and IShares Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Emerging position performs unexpectedly, IShares Intl 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 Intl will offset losses from the drop in IShares Intl's long position.| VanEck Emerging vs. BondBloxx ETF Trust | VanEck Emerging vs. Virtus ETF Trust | VanEck Emerging vs. Ocean Park High | VanEck Emerging vs. Virtus ETF Trust |
| IShares Intl vs. First Trust Senior | IShares Intl vs. First Trust Low | IShares Intl vs. First Trust Enhanced | IShares Intl 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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