Correlation Between Xtrackers MSCI and IShares
Can any of the company-specific risk be diversified away by investing in both Xtrackers MSCI and IShares 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 IShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers MSCI Europe and IShares, you can compare the effects of market volatilities on Xtrackers MSCI and IShares 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 IShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers MSCI and IShares.
Diversification Opportunities for Xtrackers MSCI and IShares
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xtrackers and IShares is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI Europe and IShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares 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 Europe are associated (or correlated) with IShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares has no effect on the direction of Xtrackers MSCI i.e., Xtrackers MSCI and IShares go up and down completely randomly.
Pair Corralation between Xtrackers MSCI and IShares
Given the investment horizon of 90 days Xtrackers MSCI Europe is expected to generate 0.86 times more return on investment than IShares. However, Xtrackers MSCI Europe is 1.16 times less risky than IShares. It trades about 0.06 of its potential returns per unit of risk. IShares is currently generating about 0.05 per unit of risk. If you would invest 3,594 in Xtrackers MSCI Europe on August 31, 2024 and sell it today you would earn a total of 515.00 from holding Xtrackers MSCI Europe or generate 14.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 79.62% |
| Values | Daily Returns |
Xtrackers MSCI Europe vs. IShares
Performance |
| Timeline |
| Xtrackers MSCI Europe |
| IShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Xtrackers MSCI and IShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers MSCI and IShares
The main advantage of trading using opposite Xtrackers MSCI and IShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers MSCI position performs unexpectedly, IShares 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 will offset losses from the drop in IShares' long position.| Xtrackers MSCI vs. Pacer Trendpilot Mid | Xtrackers MSCI vs. Pacer Trendpilot Large | Xtrackers MSCI vs. Pacer Trendpilot 100 | Xtrackers MSCI vs. Pacer Trendpilot International |
| IShares vs. HUMANA INC | IShares vs. SCOR PK | IShares vs. Aquagold International | IShares vs. Ab Pennsylvania Portfolio |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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