Correlation Between VanEck Africa and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both VanEck Africa and IShares 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 VanEck Africa and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Africa Index and iShares MSCI Qatar, you can compare the effects of market volatilities on VanEck Africa and IShares 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 VanEck Africa with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Africa and IShares MSCI.
Diversification Opportunities for VanEck Africa and IShares MSCI
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between VanEck and IShares is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Africa Index and iShares MSCI Qatar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Qatar and VanEck Africa 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 VanEck Africa Index are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI Qatar has no effect on the direction of VanEck Africa i.e., VanEck Africa and IShares MSCI go up and down completely randomly.
Pair Corralation between VanEck Africa and IShares MSCI
Considering the 90-day investment horizon VanEck Africa Index is expected to generate 1.51 times more return on investment than IShares MSCI. However, VanEck Africa is 1.51 times more volatile than iShares MSCI Qatar. It trades about 0.27 of its potential returns per unit of risk. iShares MSCI Qatar is currently generating about -0.05 per unit of risk. If you would invest 1,569 in VanEck Africa Index on September 14, 2024 and sell it today you would earn a total of 81.00 from holding VanEck Africa Index or generate 5.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
VanEck Africa Index vs. iShares MSCI Qatar
Performance |
| Timeline |
| VanEck Africa Index |
| iShares MSCI Qatar |
VanEck Africa and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Africa and IShares MSCI
The main advantage of trading using opposite VanEck Africa and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Africa position performs unexpectedly, IShares 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 IShares MSCI will offset losses from the drop in IShares MSCI's long position.| VanEck Africa vs. iShares MSCI Qatar | VanEck Africa vs. iShares MSCI Israel | VanEck Africa vs. iShares MSCI Philippines |
| IShares MSCI vs. iShares MSCI UAE | IShares MSCI vs. iShares MSCI Saudi | IShares MSCI vs. iShares MSCI New | IShares MSCI vs. iShares MSCI Finland |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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