Correlation Between IShares and Xtrackers Emerging
Can any of the company-specific risk be diversified away by investing in both IShares and Xtrackers Emerging 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 and Xtrackers Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IShares and Xtrackers Emerging Markets, you can compare the effects of market volatilities on IShares and Xtrackers Emerging 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 with a short position of Xtrackers Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares and Xtrackers Emerging.
Diversification Opportunities for IShares and Xtrackers Emerging
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and Xtrackers is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding IShares and Xtrackers Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Emerging and IShares 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 are associated (or correlated) with Xtrackers Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Emerging has no effect on the direction of IShares i.e., IShares and Xtrackers Emerging go up and down completely randomly.
Pair Corralation between IShares and Xtrackers Emerging
If you would invest 6,301 in IShares on August 26, 2024 and sell it today you would earn a total of 0.00 from holding IShares or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
IShares vs. Xtrackers Emerging Markets
Performance |
| Timeline |
| IShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Xtrackers Emerging |
IShares and Xtrackers Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares and Xtrackers Emerging
The main advantage of trading using opposite IShares and Xtrackers Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares position performs unexpectedly, Xtrackers Emerging 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 Xtrackers Emerging will offset losses from the drop in Xtrackers Emerging's long position.| IShares vs. Aquagold International | IShares vs. Morningstar Unconstrained Allocation | IShares vs. High Yield Municipal Fund | IShares vs. Thrivent High Yield |
| Xtrackers Emerging vs. Xtrackers MSCI Emerging | Xtrackers Emerging vs. FlexShares Morningstar Emerging | Xtrackers Emerging vs. Invesco SP Emerging | Xtrackers Emerging vs. First Trust Emerging |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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