Correlation Between IShares IBoxx and VanEck Emerging
Can any of the company-specific risk be diversified away by investing in both IShares IBoxx and VanEck 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 IBoxx and VanEck Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares iBoxx Investment and VanEck Emerging Markets, you can compare the effects of market volatilities on IShares IBoxx and VanEck 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 IBoxx with a short position of VanEck Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares IBoxx and VanEck Emerging.
Diversification Opportunities for IShares IBoxx and VanEck Emerging
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and VanEck is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding iShares iBoxx Investment and VanEck Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Emerging Markets and IShares IBoxx 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 iBoxx Investment are associated (or correlated) with VanEck Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Emerging Markets has no effect on the direction of IShares IBoxx i.e., IShares IBoxx and VanEck Emerging go up and down completely randomly.
Pair Corralation between IShares IBoxx and VanEck Emerging
Considering the 90-day investment horizon IShares IBoxx is expected to generate 1.97 times less return on investment than VanEck Emerging. In addition to that, IShares IBoxx is 1.32 times more volatile than VanEck Emerging Markets. It trades about 0.06 of its total potential returns per unit of risk. VanEck Emerging Markets is currently generating about 0.16 per unit of volatility. If you would invest 1,721 in VanEck Emerging Markets on September 4, 2024 and sell it today you would earn a total of 252.00 from holding VanEck Emerging Markets or generate 14.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
iShares iBoxx Investment vs. VanEck Emerging Markets
Performance |
| Timeline |
| iShares iBoxx Investment |
| VanEck Emerging Markets |
IShares IBoxx and VanEck Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares IBoxx and VanEck Emerging
The main advantage of trading using opposite IShares IBoxx and VanEck Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares IBoxx position performs unexpectedly, VanEck 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 VanEck Emerging will offset losses from the drop in VanEck Emerging's long position.| IShares IBoxx vs. iShares iBoxx High | IShares IBoxx vs. iShares 1 3 Year | IShares IBoxx vs. iShares TIPS Bond | IShares IBoxx vs. iShares 7 10 Year |
| VanEck Emerging vs. BondBloxx ETF Trust | VanEck Emerging vs. Virtus ETF Trust | VanEck Emerging vs. Ocean Park High | VanEck Emerging vs. Virtus ETF Trust |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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