Correlation Between IShares MSCI and IShares
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and IShares 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 MSCI and IShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI Global and IShares, you can compare the effects of market volatilities on IShares MSCI and IShares 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 MSCI with a short position of IShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and IShares.
Diversification Opportunities for IShares MSCI and IShares
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between IShares and IShares is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Global and IShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares and IShares 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 iShares MSCI Global are associated (or correlated) with IShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares has no effect on the direction of IShares MSCI i.e., IShares MSCI and IShares go up and down completely randomly.
Pair Corralation between IShares MSCI and IShares
Given the investment horizon of 90 days iShares MSCI Global is expected to generate 0.57 times more return on investment than IShares. However, iShares MSCI Global is 1.74 times less risky than IShares. It trades about 0.1 of its potential returns per unit of risk. IShares is currently generating about -0.02 per unit of risk. If you would invest 9,700 in iShares MSCI Global on September 12, 2024 and sell it today you would earn a total of 1,699 from holding iShares MSCI Global or generate 17.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 76.42% |
| Values | Daily Returns |
iShares MSCI Global vs. IShares
Performance |
| Timeline |
| iShares MSCI Global |
| IShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IShares MSCI and IShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and IShares
The main advantage of trading using opposite IShares MSCI and IShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, IShares 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 will offset losses from the drop in IShares' long position.| IShares MSCI vs. Vanguard Total World | IShares MSCI vs. iShares MSCI ACWI | IShares MSCI vs. iShares Global 100 | IShares MSCI vs. iShares MSCI World |
| IShares vs. Vanguard Total World | IShares vs. iShares MSCI ACWI | IShares vs. iShares MSCI Global | IShares vs. iShares Global 100 |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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