Correlation Between MAYBANK EMERGING and IShares AsiaPacific
Can any of the company-specific risk be diversified away by investing in both MAYBANK EMERGING and IShares AsiaPacific 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 AsiaPacific 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 AsiaPacific Dividend, you can compare the effects of market volatilities on MAYBANK EMERGING and IShares AsiaPacific 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 AsiaPacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAYBANK EMERGING and IShares AsiaPacific.
Diversification Opportunities for MAYBANK EMERGING and IShares AsiaPacific
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MAYBANK and IShares is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding MAYBANK EMERGING ETF and iShares AsiaPacific Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares AsiaPacific 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 AsiaPacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares AsiaPacific has no effect on the direction of MAYBANK EMERGING i.e., MAYBANK EMERGING and IShares AsiaPacific go up and down completely randomly.
Pair Corralation between MAYBANK EMERGING and IShares AsiaPacific
Considering the 90-day investment horizon MAYBANK EMERGING ETF is expected to under-perform the IShares AsiaPacific. In addition to that, MAYBANK EMERGING is 1.0 times more volatile than iShares AsiaPacific Dividend. It trades about -0.1 of its total potential returns per unit of risk. iShares AsiaPacific Dividend is currently generating about 0.01 per unit of volatility. If you would invest 3,725 in iShares AsiaPacific Dividend on August 31, 2024 and sell it today you would earn a total of 2.00 from holding iShares AsiaPacific Dividend or generate 0.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAYBANK EMERGING ETF vs. iShares AsiaPacific Dividend
Performance |
| Timeline |
| MAYBANK EMERGING ETF |
| iShares AsiaPacific |
MAYBANK EMERGING and IShares AsiaPacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAYBANK EMERGING and IShares AsiaPacific
The main advantage of trading using opposite MAYBANK EMERGING and IShares AsiaPacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAYBANK EMERGING position performs unexpectedly, IShares AsiaPacific 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 AsiaPacific will offset losses from the drop in IShares AsiaPacific's long position.| MAYBANK EMERGING vs. Xtrackers MSCI Emerging | MAYBANK EMERGING vs. FlexShares Morningstar Emerging | MAYBANK EMERGING vs. First Trust Emerging |
| IShares AsiaPacific vs. Franklin Templeton ETF | IShares AsiaPacific vs. Altrius Global Dividend | IShares AsiaPacific vs. Invesco Exchange Traded | IShares AsiaPacific vs. Franklin International Core |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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