Correlation Between Global X and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both Global X 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 Global X and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X DAX and iShares MSCI France, you can compare the effects of market volatilities on Global X 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 Global X with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and IShares MSCI.
Diversification Opportunities for Global X and IShares MSCI
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and IShares is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Global X DAX and iShares MSCI France in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI France and Global X 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 Global X DAX 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 France has no effect on the direction of Global X i.e., Global X and IShares MSCI go up and down completely randomly.
Pair Corralation between Global X and IShares MSCI
Considering the 90-day investment horizon Global X DAX is expected to generate 1.14 times more return on investment than IShares MSCI. However, Global X is 1.14 times more volatile than iShares MSCI France. It trades about 0.25 of its potential returns per unit of risk. iShares MSCI France is currently generating about 0.06 per unit of risk. If you would invest 3,641 in Global X DAX on November 28, 2024 and sell it today you would earn a total of 206.00 from holding Global X DAX or generate 5.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X DAX vs. iShares MSCI France
Performance |
| Timeline |
| Global X DAX |
| iShares MSCI France |
Global X and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and IShares MSCI
The main advantage of trading using opposite Global X and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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.| Global X vs. Camden National | Global X vs. iShares MSCI Germany | Global X vs. SPDR EURO STOXX | Global X vs. iShares MSCI France |
| IShares MSCI vs. iShares MSCI Italy | IShares MSCI vs. iShares MSCI Netherlands | IShares MSCI vs. iShares MSCI Spain | IShares MSCI vs. iShares MSCI Belgium |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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