Correlation Between IShares China and IShares UBS
Can any of the company-specific risk be diversified away by investing in both IShares China and IShares UBS 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 China and IShares UBS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares China LargeCap and iShares UBS Government, you can compare the effects of market volatilities on IShares China and IShares UBS 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 China with a short position of IShares UBS. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares China and IShares UBS.
Diversification Opportunities for IShares China and IShares UBS
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and IShares is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding iShares China LargeCap and iShares UBS Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares UBS Government and IShares China 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 China LargeCap are associated (or correlated) with IShares UBS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares UBS Government has no effect on the direction of IShares China i.e., IShares China and IShares UBS go up and down completely randomly.
Pair Corralation between IShares China and IShares UBS
Assuming the 90 days trading horizon iShares China LargeCap is expected to under-perform the IShares UBS. In addition to that, IShares China is 3.72 times more volatile than iShares UBS Government. It trades about -0.22 of its total potential returns per unit of risk. iShares UBS Government is currently generating about 0.14 per unit of volatility. If you would invest 12,360 in iShares UBS Government on August 29, 2024 and sell it today you would earn a total of 116.00 from holding iShares UBS Government or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares China LargeCap vs. iShares UBS Government
Performance |
| Timeline |
| iShares China LargeCap |
| iShares UBS Government |
IShares China and IShares UBS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares China and IShares UBS
The main advantage of trading using opposite IShares China and IShares UBS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares China position performs unexpectedly, IShares UBS 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 UBS will offset losses from the drop in IShares UBS's long position.| IShares China vs. iShares MSCI Emerging | IShares China vs. iShares Global Aggregate | IShares China vs. iShares CoreSP MidCap | IShares China vs. iShares SP 500 |
| IShares UBS vs. iShares MSCI Emerging | IShares UBS vs. iShares Global Aggregate | IShares UBS vs. iShares CoreSP MidCap | IShares UBS vs. iShares SP 500 |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Stocks Directory Find actively traded stocks across global markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |