Correlation Between Xtrackers MSCI and IQ 50
Can any of the company-specific risk be diversified away by investing in both Xtrackers MSCI and IQ 50 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 Xtrackers MSCI and IQ 50 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers MSCI All and IQ 50 Percent, you can compare the effects of market volatilities on Xtrackers MSCI and IQ 50 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 Xtrackers MSCI with a short position of IQ 50. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers MSCI and IQ 50.
Diversification Opportunities for Xtrackers MSCI and IQ 50
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xtrackers and HFXI is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI All and IQ 50 Percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ 50 Percent and Xtrackers 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 Xtrackers MSCI All are associated (or correlated) with IQ 50. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ 50 Percent has no effect on the direction of Xtrackers MSCI i.e., Xtrackers MSCI and IQ 50 go up and down completely randomly.
Pair Corralation between Xtrackers MSCI and IQ 50
Given the investment horizon of 90 days Xtrackers MSCI is expected to generate 1.02 times less return on investment than IQ 50. But when comparing it to its historical volatility, Xtrackers MSCI All is 1.14 times less risky than IQ 50. It trades about 0.25 of its potential returns per unit of risk. IQ 50 Percent is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,706 in IQ 50 Percent on November 28, 2024 and sell it today you would earn a total of 83.00 from holding IQ 50 Percent or generate 3.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers MSCI All vs. IQ 50 Percent
Performance |
| Timeline |
| Xtrackers MSCI All |
| IQ 50 Percent |
Xtrackers MSCI and IQ 50 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers MSCI and IQ 50
The main advantage of trading using opposite Xtrackers MSCI and IQ 50 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers MSCI position performs unexpectedly, IQ 50 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 IQ 50 will offset losses from the drop in IQ 50's long position.| Xtrackers MSCI vs. Xtrackers MSCI Emerging | Xtrackers MSCI vs. Xtrackers MSCI Eurozone | Xtrackers MSCI vs. WisdomTree Dynamic Currency | Xtrackers MSCI vs. Xtrackers MSCI Europe |
| IQ 50 vs. iShares Currency Hedged | IQ 50 vs. Xtrackers MSCI All | IQ 50 vs. iShares Currency Hedged | IQ 50 vs. WisdomTree International Hedged |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |