Correlation Between VanEck Vietnam and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both VanEck Vietnam and IShares MSCI 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 VanEck Vietnam and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Vietnam ETF and iShares MSCI Malaysia, you can compare the effects of market volatilities on VanEck Vietnam and IShares MSCI 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 VanEck Vietnam with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Vietnam and IShares MSCI.
Diversification Opportunities for VanEck Vietnam and IShares MSCI
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and IShares is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vietnam ETF and iShares MSCI Malaysia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Malaysia and VanEck Vietnam 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 VanEck Vietnam ETF are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI Malaysia has no effect on the direction of VanEck Vietnam i.e., VanEck Vietnam and IShares MSCI go up and down completely randomly.
Pair Corralation between VanEck Vietnam and IShares MSCI
Considering the 90-day investment horizon VanEck Vietnam ETF is expected to generate 1.25 times more return on investment than IShares MSCI. However, VanEck Vietnam is 1.25 times more volatile than iShares MSCI Malaysia. It trades about -0.07 of its potential returns per unit of risk. iShares MSCI Malaysia is currently generating about -0.11 per unit of risk. If you would invest 1,191 in VanEck Vietnam ETF on August 28, 2024 and sell it today you would lose (19.00) from holding VanEck Vietnam ETF or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Vietnam ETF vs. iShares MSCI Malaysia
Performance |
| Timeline |
| VanEck Vietnam ETF |
| iShares MSCI Malaysia |
VanEck Vietnam and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Vietnam and IShares MSCI
The main advantage of trading using opposite VanEck Vietnam and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Vietnam position performs unexpectedly, IShares MSCI 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 MSCI will offset losses from the drop in IShares MSCI's long position.| VanEck Vietnam vs. iShares MSCI Thailand | VanEck Vietnam vs. iShares MSCI Indonesia | VanEck Vietnam vs. iShares MSCI Turkey | VanEck Vietnam vs. iShares MSCI Philippines |
| IShares MSCI vs. iShares MSCI Singapore | IShares MSCI vs. iShares MSCI Taiwan | IShares MSCI vs. iShares MSCI Australia | IShares MSCI vs. iShares MSCI Hong |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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