Correlation Between IShares MSCI and EA Series
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and EA Series 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 EA Series 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 EA Series Trust, you can compare the effects of market volatilities on IShares MSCI and EA Series 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 EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and EA Series.
Diversification Opportunities for IShares MSCI and EA Series
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and CCMG is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Global and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series Trust 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 EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of IShares MSCI i.e., IShares MSCI and EA Series go up and down completely randomly.
Pair Corralation between IShares MSCI and EA Series
Given the investment horizon of 90 days iShares MSCI Global is expected to generate 0.65 times more return on investment than EA Series. However, iShares MSCI Global is 1.53 times less risky than EA Series. It trades about 0.18 of its potential returns per unit of risk. EA Series Trust is currently generating about 0.08 per unit of risk. If you would invest 10,383 in iShares MSCI Global on September 1, 2024 and sell it today you would earn a total of 1,159 from holding iShares MSCI Global or generate 11.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI Global vs. EA Series Trust
Performance |
| Timeline |
| iShares MSCI Global |
| EA Series Trust |
IShares MSCI and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and EA Series
The main advantage of trading using opposite IShares MSCI and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, EA Series 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 EA Series will offset losses from the drop in EA Series' long position.| IShares MSCI vs. iShares MSCI Emerging | IShares MSCI vs. BMO Long Federal | IShares MSCI vs. iShares MSCI EAFE | IShares MSCI vs. Vanguard Total Market |
| EA Series vs. WisdomTree Interest Rate | EA Series vs. First Trust Developed | EA Series vs. VictoryShares International Volatility | EA Series vs. Aquagold International |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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