Correlation Between FlexShares Real and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both FlexShares Real 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 FlexShares Real and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FlexShares Real Assets and iShares MSCI Emerging, you can compare the effects of market volatilities on FlexShares Real 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 FlexShares Real with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of FlexShares Real and IShares MSCI.
Diversification Opportunities for FlexShares Real and IShares MSCI
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FlexShares and IShares is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding FlexShares Real Assets and iShares MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Emerging and FlexShares Real 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 FlexShares Real Assets 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 Emerging has no effect on the direction of FlexShares Real i.e., FlexShares Real and IShares MSCI go up and down completely randomly.
Pair Corralation between FlexShares Real and IShares MSCI
Given the investment horizon of 90 days FlexShares Real Assets is expected to generate 0.92 times more return on investment than IShares MSCI. However, FlexShares Real Assets is 1.09 times less risky than IShares MSCI. It trades about 0.11 of its potential returns per unit of risk. iShares MSCI Emerging is currently generating about -0.13 per unit of risk. If you would invest 3,191 in FlexShares Real Assets on August 30, 2024 and sell it today you would earn a total of 45.00 from holding FlexShares Real Assets or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FlexShares Real Assets vs. iShares MSCI Emerging
Performance |
| Timeline |
| FlexShares Real Assets |
| iShares MSCI Emerging |
FlexShares Real and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FlexShares Real and IShares MSCI
The main advantage of trading using opposite FlexShares Real and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FlexShares Real 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.| FlexShares Real vs. Mackenzie Canadian Equity | FlexShares Real vs. Mackenzie Large Cap | FlexShares Real vs. BMO MSCI EAFE | FlexShares Real vs. BMO Long Federal |
| IShares MSCI vs. ABIVAX Socit Anonyme | IShares MSCI vs. HUMANA INC | IShares MSCI vs. SCOR PK | IShares MSCI 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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