Correlation Between IShares Global and IShares Core
Can any of the company-specific risk be diversified away by investing in both IShares Global and IShares Core 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 Global and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Global Aggregate and iShares Core MSCI, you can compare the effects of market volatilities on IShares Global and IShares Core 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 Global with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and IShares Core.
Diversification Opportunities for IShares Global and IShares Core
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and IShares is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Aggregate and iShares Core MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core MSCI and IShares Global 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 Global Aggregate are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core MSCI has no effect on the direction of IShares Global i.e., IShares Global and IShares Core go up and down completely randomly.
Pair Corralation between IShares Global and IShares Core
Assuming the 90 days trading horizon IShares Global is expected to generate 5.26 times less return on investment than IShares Core. But when comparing it to its historical volatility, iShares Global Aggregate is 3.65 times less risky than IShares Core. It trades about 0.19 of its potential returns per unit of risk. iShares Core MSCI is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 3,011 in iShares Core MSCI on September 1, 2024 and sell it today you would earn a total of 139.00 from holding iShares Core MSCI or generate 4.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global Aggregate vs. iShares Core MSCI
Performance |
| Timeline |
| iShares Global Aggregate |
| iShares Core MSCI |
IShares Global and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and IShares Core
The main advantage of trading using opposite IShares Global and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, IShares Core 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 Core will offset losses from the drop in IShares Core's long position.| IShares Global vs. iShares MSCI Emerging | IShares Global vs. iShares CoreSP MidCap | IShares Global vs. iShares SP 500 | IShares Global vs. iShares Core MSCI |
| IShares Core vs. Champion Iron | IShares Core vs. Australian Dairy Farms | IShares Core vs. Perpetual Credit Income | IShares Core vs. Greentech Metals |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |