| HEFA Etf | | | USD 37.76 0.22 0.59% |
The current 90-days correlation between iShares Currency Hedged and Xtrackers MSCI EAFE is 0.99 (i.e., No risk reduction). The correlation of IShares Currency is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
IShares Currency Correlation With Market
Poor diversification
The correlation between iShares Currency Hedged and DJI is 0.78 (i.e., Poor diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding iShares Currency Hedged and DJI in the same portfolio, assuming nothing else is changed.
Check out
Risk vs Return Analysis to better understand how to build diversified portfolios, which includes a position in iShares Currency Hedged. Also, note that the market value of any etf could be closely tied with the direction of predictive economic indicators such as
signals in census.