Correlation Between MAYBANK EMERGING and IShares Asia
Can any of the company-specific risk be diversified away by investing in both MAYBANK EMERGING and IShares Asia 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 MAYBANK EMERGING and IShares Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAYBANK EMERGING ETF and iShares Asia 50, you can compare the effects of market volatilities on MAYBANK EMERGING and IShares Asia 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 MAYBANK EMERGING with a short position of IShares Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAYBANK EMERGING and IShares Asia.
Diversification Opportunities for MAYBANK EMERGING and IShares Asia
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between MAYBANK and IShares is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding MAYBANK EMERGING ETF and iShares Asia 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Asia 50 and MAYBANK EMERGING 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 MAYBANK EMERGING ETF are associated (or correlated) with IShares Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Asia 50 has no effect on the direction of MAYBANK EMERGING i.e., MAYBANK EMERGING and IShares Asia go up and down completely randomly.
Pair Corralation between MAYBANK EMERGING and IShares Asia
Considering the 90-day investment horizon MAYBANK EMERGING is expected to generate 1.25 times less return on investment than IShares Asia. But when comparing it to its historical volatility, MAYBANK EMERGING ETF is 1.42 times less risky than IShares Asia. It trades about 0.05 of its potential returns per unit of risk. iShares Asia 50 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,640 in iShares Asia 50 on August 26, 2024 and sell it today you would earn a total of 1,294 from holding iShares Asia 50 or generate 22.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAYBANK EMERGING ETF vs. iShares Asia 50
Performance |
| Timeline |
| MAYBANK EMERGING ETF |
| iShares Asia 50 |
MAYBANK EMERGING and IShares Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAYBANK EMERGING and IShares Asia
The main advantage of trading using opposite MAYBANK EMERGING and IShares Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAYBANK EMERGING position performs unexpectedly, IShares Asia 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 Asia will offset losses from the drop in IShares Asia's long position.| MAYBANK EMERGING vs. RENN Fund | MAYBANK EMERGING vs. Sunlands Technology Group | MAYBANK EMERGING vs. ECGI Holdings | MAYBANK EMERGING vs. Cohen Steers Tax Advantaged |
| IShares Asia vs. Matthews China Active | IShares Asia vs. MAYBANK EMERGING ETF | IShares Asia vs. Matthews Emerging Markets | IShares Asia vs. JP Morgan Exchange Traded |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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