Correlation Between IShares MSCI and MAYBANK EMERGING
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and MAYBANK 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 MAYBANK 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 MAYBANK EMERGING ETF, you can compare the effects of market volatilities on IShares MSCI and MAYBANK 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 MAYBANK EMERGING. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and MAYBANK EMERGING.
Diversification Opportunities for IShares MSCI and MAYBANK EMERGING
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and MAYBANK is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Emerging and MAYBANK EMERGING ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAYBANK EMERGING ETF 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 MAYBANK EMERGING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAYBANK EMERGING ETF has no effect on the direction of IShares MSCI i.e., IShares MSCI and MAYBANK EMERGING go up and down completely randomly.
Pair Corralation between IShares MSCI and MAYBANK EMERGING
Considering the 90-day investment horizon IShares MSCI is expected to generate 1.83 times less return on investment than MAYBANK EMERGING. But when comparing it to its historical volatility, iShares MSCI Emerging is 1.05 times less risky than MAYBANK EMERGING. It trades about 0.03 of its potential returns per unit of risk. MAYBANK EMERGING ETF is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,985 in MAYBANK EMERGING ETF on September 1, 2024 and sell it today you would earn a total of 190.00 from holding MAYBANK EMERGING ETF or generate 6.37% 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. MAYBANK EMERGING ETF
Performance |
| Timeline |
| iShares MSCI Emerging |
| MAYBANK EMERGING ETF |
IShares MSCI and MAYBANK EMERGING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and MAYBANK EMERGING
The main advantage of trading using opposite IShares MSCI and MAYBANK EMERGING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, MAYBANK 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 MAYBANK EMERGING will offset losses from the drop in MAYBANK 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 |
| MAYBANK EMERGING vs. Xtrackers MSCI Emerging | MAYBANK EMERGING vs. FlexShares Morningstar Emerging | MAYBANK EMERGING vs. First Trust Emerging |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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