Correlation Between GUOTAI JUNAN and MSCI
Can any of the company-specific risk be diversified away by investing in both GUOTAI JUNAN and 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 GUOTAI JUNAN and MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GUOTAI JUNAN SEC and MSCI Inc, you can compare the effects of market volatilities on GUOTAI JUNAN and 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 GUOTAI JUNAN with a short position of MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of GUOTAI JUNAN and MSCI.
Diversification Opportunities for GUOTAI JUNAN and MSCI
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GUOTAI and MSCI is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding GUOTAI JUNAN SEC and MSCI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSCI Inc and GUOTAI JUNAN 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 GUOTAI JUNAN SEC are associated (or correlated) with MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSCI Inc has no effect on the direction of GUOTAI JUNAN i.e., GUOTAI JUNAN and MSCI go up and down completely randomly.
Pair Corralation between GUOTAI JUNAN and MSCI
Assuming the 90 days trading horizon GUOTAI JUNAN is expected to generate 1.95 times less return on investment than MSCI. In addition to that, GUOTAI JUNAN is 1.8 times more volatile than MSCI Inc. It trades about 0.06 of its total potential returns per unit of risk. MSCI Inc is currently generating about 0.21 per unit of volatility. If you would invest 52,993 in MSCI Inc on August 30, 2024 and sell it today you would earn a total of 3,867 from holding MSCI Inc or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GUOTAI JUNAN SEC vs. MSCI Inc
Performance |
| Timeline |
| GUOTAI JUNAN SEC |
| MSCI Inc |
GUOTAI JUNAN and MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GUOTAI JUNAN and MSCI
The main advantage of trading using opposite GUOTAI JUNAN and MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GUOTAI JUNAN position performs unexpectedly, 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 MSCI will offset losses from the drop in MSCI's long position.| GUOTAI JUNAN vs. MSCI Inc | GUOTAI JUNAN vs. Superior Plus Corp | GUOTAI JUNAN vs. NMI Holdings | GUOTAI JUNAN vs. SIVERS SEMICONDUCTORS AB |
| MSCI vs. Amkor Technology | MSCI vs. GLG LIFE TECH | MSCI vs. Lion Biotechnologies | MSCI vs. The Hanover Insurance |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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