Correlation Between IShares Asia and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both IShares Asia and IShares MSCI 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 Asia and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Asia 50 and iShares MSCI Emerging, you can compare the effects of market volatilities on IShares Asia and IShares MSCI 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 Asia with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Asia and IShares MSCI.
Diversification Opportunities for IShares Asia and IShares MSCI
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and IShares is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares Asia 50 and iShares MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Emerging and IShares Asia 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 Asia 50 are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI Emerging has no effect on the direction of IShares Asia i.e., IShares Asia and IShares MSCI go up and down completely randomly.
Pair Corralation between IShares Asia and IShares MSCI
Assuming the 90 days trading horizon iShares Asia 50 is expected to under-perform the IShares MSCI. In addition to that, IShares Asia is 1.46 times more volatile than iShares MSCI Emerging. It trades about -0.28 of its total potential returns per unit of risk. iShares MSCI Emerging is currently generating about -0.26 per unit of volatility. If you would invest 6,815 in iShares MSCI Emerging on August 29, 2024 and sell it today you would lose (202.00) from holding iShares MSCI Emerging or give up 2.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Asia 50 vs. iShares MSCI Emerging
Performance |
| Timeline |
| iShares Asia 50 |
| iShares MSCI Emerging |
IShares Asia and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Asia and IShares MSCI
The main advantage of trading using opposite IShares Asia and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Asia position performs unexpectedly, IShares MSCI 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 MSCI will offset losses from the drop in IShares MSCI's long position.| IShares Asia vs. iShares MSCI Emerging | IShares Asia vs. iShares Global Aggregate | IShares Asia vs. iShares CoreSP MidCap | IShares Asia vs. iShares SP 500 |
| IShares MSCI vs. Betashares Asia Technology | IShares MSCI vs. CD Private Equity | IShares MSCI vs. BetaShares Australia 200 | IShares MSCI vs. Australian High Interest |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |