Correlation Between DSJA and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both DSJA 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 DSJA and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSJA and iShares MSCI ACWI, you can compare the effects of market volatilities on DSJA 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 DSJA with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSJA and IShares MSCI.
Diversification Opportunities for DSJA and IShares MSCI
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DSJA and IShares is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding DSJA and iShares MSCI ACWI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI ACWI and DSJA 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 DSJA 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 ACWI has no effect on the direction of DSJA i.e., DSJA and IShares MSCI go up and down completely randomly.
Pair Corralation between DSJA and IShares MSCI
Given the investment horizon of 90 days DSJA is expected to generate 0.84 times more return on investment than IShares MSCI. However, DSJA is 1.19 times less risky than IShares MSCI. It trades about 0.13 of its potential returns per unit of risk. iShares MSCI ACWI is currently generating about 0.05 per unit of risk. If you would invest 2,501 in DSJA on September 2, 2024 and sell it today you would earn a total of 364.00 from holding DSJA or generate 14.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.05% |
| Values | Daily Returns |
DSJA vs. iShares MSCI ACWI
Performance |
| Timeline |
| DSJA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| iShares MSCI ACWI |
DSJA and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DSJA and IShares MSCI
The main advantage of trading using opposite DSJA and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSJA 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.The idea behind DSJA and iShares MSCI ACWI pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| IShares MSCI vs. iShares MSCI ACWI | IShares MSCI vs. iShares MSCI All | IShares MSCI vs. iShares MSCI EAFE | IShares MSCI vs. SPDR MSCI ACWI |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Stocks Directory Find actively traded stocks across global markets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |