Correlation Between IShares MSCI and WisdomTree China
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and WisdomTree China 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 MSCI and WisdomTree China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI China and WisdomTree China ex State Owned, you can compare the effects of market volatilities on IShares MSCI and WisdomTree China 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 MSCI with a short position of WisdomTree China. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and WisdomTree China.
Diversification Opportunities for IShares MSCI and WisdomTree China
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and WisdomTree is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI China and WisdomTree China ex State Owne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree China and IShares MSCI 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 MSCI China are associated (or correlated) with WisdomTree China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree China has no effect on the direction of IShares MSCI i.e., IShares MSCI and WisdomTree China go up and down completely randomly.
Pair Corralation between IShares MSCI and WisdomTree China
Given the investment horizon of 90 days iShares MSCI China is expected to generate 0.84 times more return on investment than WisdomTree China. However, iShares MSCI China is 1.19 times less risky than WisdomTree China. It trades about 0.0 of its potential returns per unit of risk. WisdomTree China ex State Owned is currently generating about 0.0 per unit of risk. If you would invest 3,031 in iShares MSCI China on August 24, 2024 and sell it today you would lose (91.00) from holding iShares MSCI China or give up 3.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI China vs. WisdomTree China ex State Owne
Performance |
| Timeline |
| iShares MSCI China |
| WisdomTree China |
IShares MSCI and WisdomTree China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and WisdomTree China
The main advantage of trading using opposite IShares MSCI and WisdomTree China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, WisdomTree China 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 WisdomTree China will offset losses from the drop in WisdomTree China's long position.| IShares MSCI vs. iShares MSCI China | IShares MSCI vs. KraneShares Bosera MSCI | IShares MSCI vs. WisdomTree China ex State Owned | IShares MSCI vs. iShares MSCI China |
| WisdomTree China vs. Global X MSCI | WisdomTree China vs. WisdomTree Emerging Markets | WisdomTree China vs. Invesco China Technology | WisdomTree China vs. iShares MSCI China |
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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