Correlation Between IShares MSCI and SmartETFs Dividend
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and SmartETFs Dividend 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 MSCI and SmartETFs Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI China and SmartETFs Dividend Builder, you can compare the effects of market volatilities on IShares MSCI and SmartETFs Dividend 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 MSCI with a short position of SmartETFs Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and SmartETFs Dividend.
Diversification Opportunities for IShares MSCI and SmartETFs Dividend
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and SmartETFs is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI China and SmartETFs Dividend Builder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartETFs Dividend and IShares MSCI 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 MSCI China are associated (or correlated) with SmartETFs Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartETFs Dividend has no effect on the direction of IShares MSCI i.e., IShares MSCI and SmartETFs Dividend go up and down completely randomly.
Pair Corralation between IShares MSCI and SmartETFs Dividend
Given the investment horizon of 90 days IShares MSCI is expected to generate 2.7 times less return on investment than SmartETFs Dividend. In addition to that, IShares MSCI is 2.8 times more volatile than SmartETFs Dividend Builder. It trades about 0.01 of its total potential returns per unit of risk. SmartETFs Dividend Builder is currently generating about 0.09 per unit of volatility. If you would invest 2,229 in SmartETFs Dividend Builder on August 28, 2024 and sell it today you would earn a total of 726.00 from holding SmartETFs Dividend Builder or generate 32.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI China vs. SmartETFs Dividend Builder
Performance |
| Timeline |
| iShares MSCI China |
| SmartETFs Dividend |
IShares MSCI and SmartETFs Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and SmartETFs Dividend
The main advantage of trading using opposite IShares MSCI and SmartETFs Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, SmartETFs Dividend 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 SmartETFs Dividend will offset losses from the drop in SmartETFs Dividend's long position.| IShares MSCI vs. KraneShares CSI China | IShares MSCI vs. Invesco China Technology | IShares MSCI vs. iShares MSCI India | IShares MSCI vs. Xtrackers Harvest CSI |
| SmartETFs Dividend vs. SmartETFs Asia Pacific | SmartETFs Dividend vs. Listed Funds Trust | SmartETFs Dividend vs. iShares AsiaPacific Dividend | SmartETFs Dividend vs. ProShares MSCI 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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