Correlation Between IShares MSCI and Vident International
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and Vident International 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 Vident International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI ACWI and Vident International Equity, you can compare the effects of market volatilities on IShares MSCI and Vident International 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 Vident International. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Vident International.
Diversification Opportunities for IShares MSCI and Vident International
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and Vident is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI ACWI and Vident International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vident International 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 ACWI are associated (or correlated) with Vident International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vident International has no effect on the direction of IShares MSCI i.e., IShares MSCI and Vident International go up and down completely randomly.
Pair Corralation between IShares MSCI and Vident International
Given the investment horizon of 90 days iShares MSCI ACWI is expected to generate 1.03 times more return on investment than Vident International. However, IShares MSCI is 1.03 times more volatile than Vident International Equity. It trades about 0.2 of its potential returns per unit of risk. Vident International Equity is currently generating about 0.19 per unit of risk. If you would invest 19,322 in iShares MSCI ACWI on November 3, 2024 and sell it today you would earn a total of 632.00 from holding iShares MSCI ACWI or generate 3.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI ACWI vs. Vident International Equity
Performance |
| Timeline |
| iShares MSCI ACWI |
| Vident International |
IShares MSCI and Vident International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and Vident International
The main advantage of trading using opposite IShares MSCI and Vident International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, Vident International 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 Vident International will offset losses from the drop in Vident International's long position.| IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. SPDR SSGA Gender | IShares MSCI vs. iShares MSCI KLD | IShares MSCI vs. SPDR SP 500 |
| Vident International vs. Vident Core Equity | Vident International vs. Vident Core Bond | Vident International vs. iShares MSCI ACWI | Vident International vs. BMO Mid Federal |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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