Correlation Between IShares MSCI and VanEck Vietnam
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and VanEck Vietnam 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 VanEck Vietnam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI Turkey and VanEck Vietnam ETF, you can compare the effects of market volatilities on IShares MSCI and VanEck Vietnam 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 VanEck Vietnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and VanEck Vietnam.
Diversification Opportunities for IShares MSCI and VanEck Vietnam
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and VanEck is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Turkey and VanEck Vietnam ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Vietnam ETF 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 Turkey are associated (or correlated) with VanEck Vietnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Vietnam ETF has no effect on the direction of IShares MSCI i.e., IShares MSCI and VanEck Vietnam go up and down completely randomly.
Pair Corralation between IShares MSCI and VanEck Vietnam
Considering the 90-day investment horizon iShares MSCI Turkey is expected to under-perform the VanEck Vietnam. In addition to that, IShares MSCI is 1.53 times more volatile than VanEck Vietnam ETF. It trades about -0.09 of its total potential returns per unit of risk. VanEck Vietnam ETF is currently generating about -0.07 per unit of volatility. If you would invest 1,282 in VanEck Vietnam ETF on August 24, 2024 and sell it today you would lose (119.00) from holding VanEck Vietnam ETF or give up 9.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI Turkey vs. VanEck Vietnam ETF
Performance |
| Timeline |
| iShares MSCI Turkey |
| VanEck Vietnam ETF |
IShares MSCI and VanEck Vietnam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and VanEck Vietnam
The main advantage of trading using opposite IShares MSCI and VanEck Vietnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, VanEck Vietnam 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 Vietnam will offset losses from the drop in VanEck Vietnam's long position.| IShares MSCI vs. iShares MSCI Thailand | IShares MSCI vs. iShares MSCI Chile | IShares MSCI vs. iShares MSCI South | IShares MSCI vs. iShares MSCI Indonesia |
| VanEck Vietnam vs. iShares MSCI Thailand | VanEck Vietnam vs. iShares MSCI Indonesia | VanEck Vietnam vs. iShares MSCI Turkey | VanEck Vietnam vs. iShares MSCI Philippines |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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