Correlation Between Xtrackers MSCI and IShares Asia
Can any of the company-specific risk be diversified away by investing in both Xtrackers MSCI and IShares Asia 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 Xtrackers MSCI and IShares Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers MSCI China and iShares Asia Pacific, you can compare the effects of market volatilities on Xtrackers MSCI and IShares Asia 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 Xtrackers MSCI with a short position of IShares Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers MSCI and IShares Asia.
Diversification Opportunities for Xtrackers MSCI and IShares Asia
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xtrackers and IShares is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI China and iShares Asia Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Asia Pacific and Xtrackers 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 Xtrackers MSCI China are associated (or correlated) with IShares Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Asia Pacific has no effect on the direction of Xtrackers MSCI i.e., Xtrackers MSCI and IShares Asia go up and down completely randomly.
Pair Corralation between Xtrackers MSCI and IShares Asia
Assuming the 90 days trading horizon Xtrackers MSCI China is expected to under-perform the IShares Asia. In addition to that, Xtrackers MSCI is 2.54 times more volatile than iShares Asia Pacific. It trades about -0.08 of its total potential returns per unit of risk. iShares Asia Pacific is currently generating about 0.17 per unit of volatility. If you would invest 2,250 in iShares Asia Pacific on October 29, 2024 and sell it today you would earn a total of 44.00 from holding iShares Asia Pacific or generate 1.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 77.78% |
| Values | Daily Returns |
Xtrackers MSCI China vs. iShares Asia Pacific
Performance |
| Timeline |
| Xtrackers MSCI China |
| iShares Asia Pacific |
Xtrackers MSCI and IShares Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers MSCI and IShares Asia
The main advantage of trading using opposite Xtrackers MSCI and IShares Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers MSCI position performs unexpectedly, IShares Asia 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 Asia will offset losses from the drop in IShares Asia's long position.| Xtrackers MSCI vs. UBSFund Solutions MSCI | Xtrackers MSCI vs. Vanguard SP 500 | Xtrackers MSCI vs. iShares VII PLC | Xtrackers MSCI vs. iShares Core SP |
| IShares Asia vs. iShares Corp Bond | IShares Asia vs. iShares Emerging Asia | IShares Asia vs. iShares MSCI Global | IShares Asia vs. iShares VII PLC |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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