Correlation Between IShares BRIC and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both IShares BRIC 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 BRIC 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 BRIC 50 and SPDR MSCI World, you can compare the effects of market volatilities on IShares BRIC 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 BRIC with a short position of SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares BRIC and SPDR MSCI.
Diversification Opportunities for IShares BRIC and SPDR MSCI
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and SPDR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares BRIC 50 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 BRIC 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 BRIC 50 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 BRIC i.e., IShares BRIC and SPDR MSCI go up and down completely randomly.
Pair Corralation between IShares BRIC and SPDR MSCI
If you would invest 6,588 in SPDR MSCI World on August 29, 2024 and sell it today you would earn a total of 342.00 from holding SPDR MSCI World or generate 5.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
iShares BRIC 50 vs. SPDR MSCI World
Performance |
| Timeline |
| iShares BRIC 50 |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| SPDR MSCI World |
IShares BRIC and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares BRIC and SPDR MSCI
The main advantage of trading using opposite IShares BRIC and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares BRIC 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.The idea behind iShares BRIC 50 and SPDR MSCI World pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SPDR MSCI vs. SPDR MSCI World | SPDR MSCI vs. SPDR SP Dividend | SPDR MSCI vs. SPDR SP 500 | SPDR MSCI vs. SPDR BB SB |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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