Correlation Between IShares Global and Xtrackers International
Can any of the company-specific risk be diversified away by investing in both IShares Global and Xtrackers International 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 Global and Xtrackers International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Global REIT and Xtrackers International Real, you can compare the effects of market volatilities on IShares Global and Xtrackers International 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 Global with a short position of Xtrackers International. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and Xtrackers International.
Diversification Opportunities for IShares Global and Xtrackers International
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Xtrackers is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global REIT and Xtrackers International Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers International and IShares Global 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 Global REIT are associated (or correlated) with Xtrackers International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers International has no effect on the direction of IShares Global i.e., IShares Global and Xtrackers International go up and down completely randomly.
Pair Corralation between IShares Global and Xtrackers International
Given the investment horizon of 90 days iShares Global REIT is expected to generate 0.91 times more return on investment than Xtrackers International. However, iShares Global REIT is 1.09 times less risky than Xtrackers International. It trades about -0.05 of its potential returns per unit of risk. Xtrackers International Real is currently generating about -0.26 per unit of risk. If you would invest 2,600 in iShares Global REIT on August 23, 2024 and sell it today you would lose (28.00) from holding iShares Global REIT or give up 1.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global REIT vs. Xtrackers International Real
Performance |
| Timeline |
| iShares Global REIT |
| Xtrackers International |
IShares Global and Xtrackers International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and Xtrackers International
The main advantage of trading using opposite IShares Global and Xtrackers International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, Xtrackers International 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 Xtrackers International will offset losses from the drop in Xtrackers International's long position.| IShares Global vs. iShares Core REIT | IShares Global vs. Schwab REIT ETF | IShares Global vs. Global X SuperDividend | IShares Global vs. Fidelity MSCI Real |
| Xtrackers International vs. FlexShares Global Quality | Xtrackers International vs. ALPS REIT Dividend | Xtrackers International vs. WisdomTree New Economy | Xtrackers International vs. First Trust RBA |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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