Correlation Between IShares Global and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both IShares Global and SPDR 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 IShares Global and SPDR MSCI 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 SPDR MSCI World, you can compare the effects of market volatilities on IShares Global and SPDR 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 IShares Global with a short position of SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and SPDR MSCI.
Diversification Opportunities for IShares Global and SPDR MSCI
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and SPDR is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Aggregate and SPDR MSCI World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI World 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 SPDR MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI World has no effect on the direction of IShares Global i.e., IShares Global and SPDR MSCI go up and down completely randomly.
Pair Corralation between IShares Global and SPDR MSCI
Assuming the 90 days trading horizon iShares Global Aggregate is expected to under-perform the SPDR MSCI. But the etf apears to be less risky and, when comparing its historical volatility, iShares Global Aggregate is 8.48 times less risky than SPDR MSCI. The etf trades about -0.27 of its potential returns per unit of risk. The SPDR MSCI World is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 16,186 in SPDR MSCI World on August 27, 2024 and sell it today you would earn a total of 734.00 from holding SPDR MSCI World or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global Aggregate vs. SPDR MSCI World
Performance |
| Timeline |
| iShares Global Aggregate |
| SPDR MSCI World |
IShares Global and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and SPDR MSCI
The main advantage of trading using opposite IShares Global and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, SPDR 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 SPDR MSCI will offset losses from the drop in SPDR MSCI's long position.| IShares Global vs. Vanguard SP 500 | IShares Global vs. SPDR Dow Jones | IShares Global vs. iShares Core MSCI | IShares Global vs. iShares SP 500 |
| SPDR MSCI vs. SPDR Dow Jones | SPDR MSCI vs. iShares SP 500 | SPDR MSCI vs. iShares China CNY | SPDR MSCI vs. iShares Core MSCI |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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