Correlation Between IShares and IShares International
Can any of the company-specific risk be diversified away by investing in both IShares and IShares International 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 IShares International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IShares and iShares International Dividend, you can compare the effects of market volatilities on IShares and IShares International 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 IShares International. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares and IShares International.
Diversification Opportunities for IShares and IShares International
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and IShares is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding IShares and iShares International Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares International 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 IShares International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares International has no effect on the direction of IShares i.e., IShares and IShares International go up and down completely randomly.
Pair Corralation between IShares and IShares International
Given the investment horizon of 90 days IShares is expected to generate 1.16 times more return on investment than IShares International. However, IShares is 1.16 times more volatile than iShares International Dividend. It trades about 0.08 of its potential returns per unit of risk. iShares International Dividend is currently generating about 0.07 per unit of risk. If you would invest 4,798 in IShares on September 4, 2024 and sell it today you would earn a total of 1,503 from holding IShares or generate 31.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 84.24% |
| Values | Daily Returns |
IShares vs. iShares International Dividend
Performance |
| Timeline |
| IShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| iShares International |
IShares and IShares International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares and IShares International
The main advantage of trading using opposite IShares and IShares International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares position performs unexpectedly, IShares International 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 International will offset losses from the drop in IShares International's long position.| IShares vs. VanEck Merk Gold | IShares vs. Goldman Sachs Physical | IShares vs. GraniteShares Gold Trust | IShares vs. iShares Gold Trust |
| IShares International vs. iShares Core SP | IShares International vs. iShares Core 1 5 | IShares International vs. iShares Core MSCI | IShares International vs. iShares Core MSCI |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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