Correlation Between IShares VII and Xtrackers MSCI
Can any of the company-specific risk be diversified away by investing in both IShares VII and Xtrackers 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 VII and Xtrackers MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares VII PLC and Xtrackers MSCI EMU, you can compare the effects of market volatilities on IShares VII and Xtrackers 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 VII with a short position of Xtrackers MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares VII and Xtrackers MSCI.
Diversification Opportunities for IShares VII and Xtrackers MSCI
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and Xtrackers is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding iShares VII PLC and Xtrackers MSCI EMU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers MSCI EMU and IShares VII 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 VII PLC are associated (or correlated) with Xtrackers MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers MSCI EMU has no effect on the direction of IShares VII i.e., IShares VII and Xtrackers MSCI go up and down completely randomly.
Pair Corralation between IShares VII and Xtrackers MSCI
Assuming the 90 days trading horizon iShares VII PLC is expected to generate 1.93 times more return on investment than Xtrackers MSCI. However, IShares VII is 1.93 times more volatile than Xtrackers MSCI EMU. It trades about 0.01 of its potential returns per unit of risk. Xtrackers MSCI EMU is currently generating about -0.18 per unit of risk. If you would invest 3,843,000 in iShares VII PLC on August 28, 2024 and sell it today you would earn a total of 14,000 from holding iShares VII PLC or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
iShares VII PLC vs. Xtrackers MSCI EMU
Performance |
| Timeline |
| iShares VII PLC |
| Xtrackers MSCI EMU |
IShares VII and Xtrackers MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares VII and Xtrackers MSCI
The main advantage of trading using opposite IShares VII and Xtrackers MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares VII position performs unexpectedly, Xtrackers 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 Xtrackers MSCI will offset losses from the drop in Xtrackers MSCI's long position.| IShares VII vs. iShares Corp Bond | IShares VII vs. iShares Emerging Asia | IShares VII vs. iShares MSCI Global | IShares VII vs. iShares VII PLC |
| Xtrackers MSCI vs. UBSFund Solutions MSCI | Xtrackers MSCI vs. iShares VII PLC | Xtrackers MSCI vs. iShares SP 500 | Xtrackers MSCI vs. Lyxor UCITS Stoxx |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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