Correlation Between IShares Asia and IShares UBS
Can any of the company-specific risk be diversified away by investing in both IShares Asia and IShares UBS 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 UBS 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 UBS Government, you can compare the effects of market volatilities on IShares Asia and IShares UBS 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 UBS. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Asia and IShares UBS.
Diversification Opportunities for IShares Asia and IShares UBS
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and IShares is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding iShares Asia 50 and iShares UBS Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares UBS Government 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 UBS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares UBS Government has no effect on the direction of IShares Asia i.e., IShares Asia and IShares UBS go up and down completely randomly.
Pair Corralation between IShares Asia and IShares UBS
Assuming the 90 days trading horizon iShares Asia 50 is expected to under-perform the IShares UBS. In addition to that, IShares Asia is 2.49 times more volatile than iShares UBS Government. It trades about -0.28 of its total potential returns per unit of risk. iShares UBS Government is currently generating about 0.14 per unit of volatility. If you would invest 12,360 in iShares UBS Government on August 29, 2024 and sell it today you would earn a total of 116.00 from holding iShares UBS Government or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Asia 50 vs. iShares UBS Government
Performance |
| Timeline |
| iShares Asia 50 |
| iShares UBS Government |
IShares Asia and IShares UBS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Asia and IShares UBS
The main advantage of trading using opposite IShares Asia and IShares UBS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Asia position performs unexpectedly, IShares UBS 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 UBS will offset losses from the drop in IShares UBS'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 UBS vs. iShares MSCI Emerging | IShares UBS vs. iShares Global Aggregate | IShares UBS vs. iShares CoreSP MidCap | IShares UBS vs. iShares SP 500 |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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