Correlation Between Vanguard FTSE and IShares International
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE and IShares 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 Vanguard FTSE and IShares International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard FTSE Developed and iShares International Dividend, you can compare the effects of market volatilities on Vanguard FTSE and IShares 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 Vanguard FTSE with a short position of IShares International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and IShares International.
Diversification Opportunities for Vanguard FTSE and IShares International
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and IShares is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Developed and iShares International Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares International and Vanguard FTSE 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 Vanguard FTSE Developed are associated (or correlated) with IShares International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares International has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and IShares International go up and down completely randomly.
Pair Corralation between Vanguard FTSE and IShares International
Considering the 90-day investment horizon Vanguard FTSE Developed is expected to generate 0.94 times more return on investment than IShares International. However, Vanguard FTSE Developed is 1.07 times less risky than IShares International. It trades about -0.11 of its potential returns per unit of risk. iShares International Dividend is currently generating about -0.11 per unit of risk. If you would invest 5,071 in Vanguard FTSE Developed on August 30, 2024 and sell it today you would lose (101.00) from holding Vanguard FTSE Developed or give up 1.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard FTSE Developed vs. iShares International Dividend
Performance |
| Timeline |
| Vanguard FTSE Developed |
| iShares International |
Vanguard FTSE and IShares International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and IShares International
The main advantage of trading using opposite Vanguard FTSE and IShares International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE position performs unexpectedly, IShares 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 IShares International will offset losses from the drop in IShares International's long position.| Vanguard FTSE vs. Vanguard FTSE Emerging | Vanguard FTSE vs. Vanguard Small Cap Index | Vanguard FTSE vs. Vanguard Value Index | Vanguard FTSE vs. Vanguard Small Cap Value |
| IShares International vs. ABIVAX Socit Anonyme | IShares International vs. HUMANA INC | IShares International vs. SCOR PK | IShares International vs. Aquagold International |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |