Correlation Between IShares China and IShares Currency
Can any of the company-specific risk be diversified away by investing in both IShares China and IShares Currency 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 China and IShares Currency into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares China Large Cap and iShares Currency Hedged, you can compare the effects of market volatilities on IShares China and IShares Currency 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 China with a short position of IShares Currency. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares China and IShares Currency.
Diversification Opportunities for IShares China and IShares Currency
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and IShares is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding iShares China Large Cap and iShares Currency Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Currency Hedged and IShares China 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 China Large Cap are associated (or correlated) with IShares Currency. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Currency Hedged has no effect on the direction of IShares China i.e., IShares China and IShares Currency go up and down completely randomly.
Pair Corralation between IShares China and IShares Currency
Considering the 90-day investment horizon iShares China Large Cap is expected to under-perform the IShares Currency. In addition to that, IShares China is 1.85 times more volatile than iShares Currency Hedged. It trades about -0.03 of its total potential returns per unit of risk. iShares Currency Hedged is currently generating about 0.13 per unit of volatility. If you would invest 3,952 in iShares Currency Hedged on October 6, 2025 and sell it today you would earn a total of 235.00 from holding iShares Currency Hedged or generate 5.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares China Large Cap vs. iShares Currency Hedged
Performance |
| Timeline |
| iShares China Large |
| iShares Currency Hedged |
IShares China and IShares Currency Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares China and IShares Currency
The main advantage of trading using opposite IShares China and IShares Currency positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares China position performs unexpectedly, IShares Currency 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 Currency will offset losses from the drop in IShares Currency's long position.| IShares China vs. iShares MSCI Brazil | IShares China vs. iShares MSCI World | IShares China vs. iShares MSCI ACWI | IShares China vs. iShares SP Small Cap |
| IShares Currency vs. iShares Micro Cap ETF | IShares Currency vs. iShares Asia 50 | IShares Currency vs. First Trust Mid | IShares Currency vs. First Trust Large |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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