Correlation Between VR and IShares China
Can any of the company-specific risk be diversified away by investing in both VR and IShares China 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 VR and IShares China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VR and iShares China Large Cap, you can compare the effects of market volatilities on VR and IShares China 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 VR with a short position of IShares China. Check out your portfolio center. Please also check ongoing floating volatility patterns of VR and IShares China.
Diversification Opportunities for VR and IShares China
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VR and IShares is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding VR and iShares China Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares China Large and VR 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 VR are associated (or correlated) with IShares China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares China Large has no effect on the direction of VR i.e., VR and IShares China go up and down completely randomly.
Pair Corralation between VR and IShares China
Allowing for the 90-day total investment horizon VR is expected to generate 0.82 times more return on investment than IShares China. However, VR is 1.22 times less risky than IShares China. It trades about 0.14 of its potential returns per unit of risk. iShares China Large Cap is currently generating about 0.02 per unit of risk. If you would invest 1,778 in VR on August 24, 2024 and sell it today you would earn a total of 692.00 from holding VR or generate 38.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 32.12% |
| Values | Daily Returns |
VR vs. iShares China Large Cap
Performance |
| Timeline |
| VR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| iShares China Large |
VR and IShares China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VR and IShares China
The main advantage of trading using opposite VR and IShares China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VR position performs unexpectedly, IShares China 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 China will offset losses from the drop in IShares China's long position.| VR vs. AXIS Capital Holdings | VR vs. Renaissancere Holdings | VR vs. Aspira Womens Health | VR vs. Prenetics Global |
| IShares China vs. iShares MSCI Brazil | IShares China vs. iShares MSCI Emerging | IShares China vs. iShares MSCI Japan | IShares China 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Stocks Directory Find actively traded stocks across global markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |