Correlation Between IShares Asia and VanEck Vectors
Can any of the company-specific risk be diversified away by investing in both IShares Asia and VanEck Vectors 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 VanEck Vectors 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 VanEck Vectors Australian, you can compare the effects of market volatilities on IShares Asia and VanEck Vectors 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 VanEck Vectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Asia and VanEck Vectors.
Diversification Opportunities for IShares Asia and VanEck Vectors
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and VanEck is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding iShares Asia 50 and VanEck Vectors Australian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Vectors Australian 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 VanEck Vectors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Vectors Australian has no effect on the direction of IShares Asia i.e., IShares Asia and VanEck Vectors go up and down completely randomly.
Pair Corralation between IShares Asia and VanEck Vectors
Assuming the 90 days trading horizon iShares Asia 50 is expected to under-perform the VanEck Vectors. But the etf apears to be less risky and, when comparing its historical volatility, iShares Asia 50 is 1.37 times less risky than VanEck Vectors. The etf trades about -0.28 of its potential returns per unit of risk. The VanEck Vectors Australian is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 3,391 in VanEck Vectors Australian on August 29, 2024 and sell it today you would lose (67.00) from holding VanEck Vectors Australian or give up 1.98% 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. VanEck Vectors Australian
Performance |
| Timeline |
| iShares Asia 50 |
| VanEck Vectors Australian |
IShares Asia and VanEck Vectors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Asia and VanEck Vectors
The main advantage of trading using opposite IShares Asia and VanEck Vectors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Asia position performs unexpectedly, VanEck Vectors 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 VanEck Vectors will offset losses from the drop in VanEck Vectors' 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 |
| VanEck Vectors vs. BetaShares Global Government | VanEck Vectors vs. BetaShares Geared Australian | VanEck Vectors vs. Global X Semiconductor | VanEck Vectors vs. iShares UBS Government |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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