Correlation Between Barclays ETN and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both Barclays ETN 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 Barclays ETN and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays ETN Select and iShares MSCI USA, you can compare the effects of market volatilities on Barclays ETN 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 Barclays ETN with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays ETN and IShares MSCI.
Diversification Opportunities for Barclays ETN and IShares MSCI
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Barclays and IShares is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Barclays ETN Select and iShares MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI USA and Barclays ETN 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 Barclays ETN Select 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 USA has no effect on the direction of Barclays ETN i.e., Barclays ETN and IShares MSCI go up and down completely randomly.
Pair Corralation between Barclays ETN and IShares MSCI
Given the investment horizon of 90 days Barclays ETN Select is expected to generate 1.07 times more return on investment than IShares MSCI. However, Barclays ETN is 1.07 times more volatile than iShares MSCI USA. It trades about 0.53 of its potential returns per unit of risk. iShares MSCI USA is currently generating about 0.22 per unit of risk. If you would invest 2,654 in Barclays ETN Select on August 29, 2024 and sell it today you would earn a total of 330.00 from holding Barclays ETN Select or generate 12.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barclays ETN Select vs. iShares MSCI USA
Performance |
| Timeline |
| Barclays ETN Select |
| iShares MSCI USA |
Barclays ETN and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays ETN and IShares MSCI
The main advantage of trading using opposite Barclays ETN and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays ETN 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.| Barclays ETN vs. Alerian Energy Infrastructure | Barclays ETN vs. UBS AG London | Barclays ETN vs. First Trust North | Barclays ETN vs. Tortoise North American |
| IShares MSCI vs. BlackRock ETF Trust | IShares MSCI vs. Rbb Fund | IShares MSCI vs. Virtus ETF Trust | IShares MSCI vs. Amplify CWP Enhanced |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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