Correlation Between IShares India and VanEck ETF
Can any of the company-specific risk be diversified away by investing in both IShares India and VanEck ETF 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 India and VanEck ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares India 50 and VanEck ETF Trust, you can compare the effects of market volatilities on IShares India and VanEck ETF 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 India with a short position of VanEck ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares India and VanEck ETF.
Diversification Opportunities for IShares India and VanEck ETF
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and VanEck is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding iShares India 50 and VanEck ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck ETF Trust and IShares India 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 India 50 are associated (or correlated) with VanEck ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck ETF Trust has no effect on the direction of IShares India i.e., IShares India and VanEck ETF go up and down completely randomly.
Pair Corralation between IShares India and VanEck ETF
Given the investment horizon of 90 days iShares India 50 is expected to generate 0.53 times more return on investment than VanEck ETF. However, iShares India 50 is 1.89 times less risky than VanEck ETF. It trades about -0.09 of its potential returns per unit of risk. VanEck ETF Trust is currently generating about -0.2 per unit of risk. If you would invest 4,971 in iShares India 50 on November 18, 2024 and sell it today you would lose (61.00) from holding iShares India 50 or give up 1.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares India 50 vs. VanEck ETF Trust
Performance |
| Timeline |
| iShares India 50 |
| VanEck ETF Trust |
IShares India and VanEck ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares India and VanEck ETF
The main advantage of trading using opposite IShares India and VanEck ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares India position performs unexpectedly, VanEck ETF 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 ETF will offset losses from the drop in VanEck ETF's long position.| IShares India vs. iShares MSCI India | IShares India vs. Invesco India ETF | IShares India vs. iShares MSCI India | IShares India vs. WisdomTree India Earnings |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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