Correlation Between IShares IBonds and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both IShares IBonds 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 IShares IBonds and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares iBonds Dec and iShares MSCI USA, you can compare the effects of market volatilities on IShares IBonds 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 IShares IBonds with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares IBonds and IShares MSCI.
Diversification Opportunities for IShares IBonds and IShares MSCI
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and IShares is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding iShares iBonds Dec 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 IShares IBonds 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 iBonds Dec 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 IShares IBonds i.e., IShares IBonds and IShares MSCI go up and down completely randomly.
Pair Corralation between IShares IBonds and IShares MSCI
Assuming the 90 days trading horizon iShares iBonds Dec is expected to generate 0.24 times more return on investment than IShares MSCI. However, iShares iBonds Dec is 4.25 times less risky than IShares MSCI. It trades about 0.08 of its potential returns per unit of risk. iShares MSCI USA is currently generating about -0.07 per unit of risk. If you would invest 536.00 in iShares iBonds Dec on October 1, 2024 and sell it today you would earn a total of 1.00 from holding iShares iBonds Dec or generate 0.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares iBonds Dec vs. iShares MSCI USA
Performance |
| Timeline |
| iShares iBonds Dec |
| iShares MSCI USA |
IShares IBonds and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares IBonds and IShares MSCI
The main advantage of trading using opposite IShares IBonds and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares IBonds 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.| IShares IBonds vs. Lyxor UCITS Japan | IShares IBonds vs. Lyxor UCITS Japan | IShares IBonds vs. Lyxor UCITS Stoxx | IShares IBonds vs. Amundi CAC 40 |
| IShares MSCI vs. Lyxor UCITS Japan | IShares MSCI vs. Lyxor UCITS Japan | IShares MSCI vs. Lyxor UCITS Stoxx | IShares MSCI vs. Amundi CAC 40 |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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