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 Property and iShares MSCI World, 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
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and IShares is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding iShares Asia Property and iShares MSCI World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI World 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 Property 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 World 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 Property is expected to under-perform the IShares MSCI. But the etf apears to be less risky and, when comparing its historical volatility, iShares Asia Property is 1.46 times less risky than IShares MSCI. The etf trades about -0.18 of its potential returns per unit of risk. The iShares MSCI World is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 741.00 in iShares MSCI World on September 13, 2024 and sell it today you would lose (12.00) from holding iShares MSCI World or give up 1.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 77.27% |
| Values | Daily Returns |
iShares Asia Property vs. iShares MSCI World
Performance |
| Timeline |
| iShares Asia Property |
| iShares MSCI World |
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. Baloise Holding AG | IShares Asia vs. 21Shares Polkadot ETP | IShares Asia vs. UBS ETF MSCI | IShares Asia vs. BB Biotech AG |
| IShares MSCI vs. iShares Corp Bond | IShares MSCI vs. iShares Emerging Asia | IShares MSCI vs. iShares MSCI Global | IShares MSCI vs. iShares VII PLC |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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