Correlation Between VanEck Brazil and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both VanEck Brazil 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 Brazil 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 Brazil Small Cap and iShares MSCI Brazil, you can compare the effects of market volatilities on VanEck Brazil 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 Brazil with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Brazil and IShares MSCI.
Diversification Opportunities for VanEck Brazil and IShares MSCI
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VanEck and IShares is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Brazil Small Cap and iShares MSCI Brazil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Brazil and VanEck Brazil 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 Brazil Small Cap 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 Brazil has no effect on the direction of VanEck Brazil i.e., VanEck Brazil and IShares MSCI go up and down completely randomly.
Pair Corralation between VanEck Brazil and IShares MSCI
Considering the 90-day investment horizon VanEck Brazil is expected to generate 1.12 times less return on investment than IShares MSCI. In addition to that, VanEck Brazil is 1.21 times more volatile than iShares MSCI Brazil. It trades about 0.01 of its total potential returns per unit of risk. iShares MSCI Brazil is currently generating about 0.02 per unit of volatility. If you would invest 2,601 in iShares MSCI Brazil on August 27, 2024 and sell it today you would earn a total of 150.00 from holding iShares MSCI Brazil or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Brazil Small Cap vs. iShares MSCI Brazil
Performance |
| Timeline |
| VanEck Brazil Small |
| iShares MSCI Brazil |
VanEck Brazil and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Brazil and IShares MSCI
The main advantage of trading using opposite VanEck Brazil and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Brazil 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 Brazil vs. iShares China Large Cap | VanEck Brazil vs. iShares MSCI Mexico | VanEck Brazil vs. iShares MSCI South | VanEck Brazil vs. iShares MSCI Japan |
| IShares MSCI vs. iShares China Large Cap | IShares MSCI vs. iShares MSCI Mexico | IShares MSCI vs. iShares MSCI South | IShares MSCI vs. iShares MSCI Japan |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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