Correlation Between LG Longer and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both LG Longer 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 LG Longer and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Longer Dated and iShares MSCI Japan, you can compare the effects of market volatilities on LG Longer 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 LG Longer with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Longer and IShares MSCI.
Diversification Opportunities for LG Longer and IShares MSCI
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between COMF and IShares is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding LG Longer Dated and iShares MSCI Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Japan and LG Longer 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 LG Longer Dated 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 Japan has no effect on the direction of LG Longer i.e., LG Longer and IShares MSCI go up and down completely randomly.
Pair Corralation between LG Longer and IShares MSCI
Assuming the 90 days trading horizon LG Longer Dated is expected to generate 0.67 times more return on investment than IShares MSCI. However, LG Longer Dated is 1.48 times less risky than IShares MSCI. It trades about 0.04 of its potential returns per unit of risk. iShares MSCI Japan is currently generating about 0.03 per unit of risk. If you would invest 2,307 in LG Longer Dated on November 28, 2024 and sell it today you would earn a total of 123.00 from holding LG Longer Dated or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Longer Dated vs. iShares MSCI Japan
Performance |
| Timeline |
| LG Longer Dated |
| iShares MSCI Japan |
LG Longer and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Longer and IShares MSCI
The main advantage of trading using opposite LG Longer and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Longer 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.| LG Longer vs. iShares MSCI Japan | LG Longer vs. Amundi EUR High | LG Longer vs. iShares JP Morgan | LG Longer vs. Xtrackers MSCI |
| IShares MSCI vs. iShares JP Morgan | IShares MSCI vs. iShares MSCI Europe | IShares MSCI vs. iShares Nasdaq Biotechnology | IShares MSCI vs. iShares Global Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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