Correlation Between IShares MSCI and EMQQ Emerging
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and EMQQ Emerging 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 MSCI and EMQQ Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI Emerging and EMQQ The Emerging, you can compare the effects of market volatilities on IShares MSCI and EMQQ Emerging 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 MSCI with a short position of EMQQ Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and EMQQ Emerging.
Diversification Opportunities for IShares MSCI and EMQQ Emerging
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and EMQQ is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Emerging and EMQQ The Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMQQ The Emerging and IShares 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 iShares MSCI Emerging are associated (or correlated) with EMQQ Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMQQ The Emerging has no effect on the direction of IShares MSCI i.e., IShares MSCI and EMQQ Emerging go up and down completely randomly.
Pair Corralation between IShares MSCI and EMQQ Emerging
Considering the 90-day investment horizon IShares MSCI is expected to generate 1.76 times less return on investment than EMQQ Emerging. But when comparing it to its historical volatility, iShares MSCI Emerging is 1.47 times less risky than EMQQ Emerging. It trades about 0.03 of its potential returns per unit of risk. EMQQ The Emerging is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,156 in EMQQ The Emerging on August 26, 2024 and sell it today you would earn a total of 540.00 from holding EMQQ The Emerging or generate 17.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI Emerging vs. EMQQ The Emerging
Performance |
| Timeline |
| iShares MSCI Emerging |
| EMQQ The Emerging |
IShares MSCI and EMQQ Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and EMQQ Emerging
The main advantage of trading using opposite IShares MSCI and EMQQ Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, EMQQ Emerging 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 EMQQ Emerging will offset losses from the drop in EMQQ Emerging's long position.| IShares MSCI vs. iShares MSCI EAFE | IShares MSCI vs. iShares China Large Cap | IShares MSCI vs. iShares MSCI Brazil | IShares MSCI vs. iShares Russell 2000 |
| EMQQ Emerging vs. Invesco China Technology | EMQQ Emerging vs. Amplify Online Retail | EMQQ Emerging vs. KraneShares CSI China | EMQQ Emerging vs. Global X MSCI |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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