Correlation Between IShares MSCI and Barclays ETN
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and Barclays ETN 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 Barclays ETN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI EAFE and Barclays ETN FI, you can compare the effects of market volatilities on IShares MSCI and Barclays ETN 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 Barclays ETN. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Barclays ETN.
Diversification Opportunities for IShares MSCI and Barclays ETN
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Barclays is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI EAFE and Barclays ETN FI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays ETN FI 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 EAFE are associated (or correlated) with Barclays ETN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays ETN FI has no effect on the direction of IShares MSCI i.e., IShares MSCI and Barclays ETN go up and down completely randomly.
Pair Corralation between IShares MSCI and Barclays ETN
Considering the 90-day investment horizon iShares MSCI EAFE is expected to generate 0.78 times more return on investment than Barclays ETN. However, iShares MSCI EAFE is 1.28 times less risky than Barclays ETN. It trades about -0.03 of its potential returns per unit of risk. Barclays ETN FI is currently generating about -0.15 per unit of risk. If you would invest 7,944 in iShares MSCI EAFE on September 3, 2024 and sell it today you would lose (47.00) from holding iShares MSCI EAFE or give up 0.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI EAFE vs. Barclays ETN FI
Performance |
| Timeline |
| iShares MSCI EAFE |
| Barclays ETN FI |
IShares MSCI and Barclays ETN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and Barclays ETN
The main advantage of trading using opposite IShares MSCI and Barclays ETN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, Barclays ETN 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 Barclays ETN will offset losses from the drop in Barclays ETN's long position.| IShares MSCI vs. iShares MSCI Emerging | IShares MSCI vs. iShares Core Aggregate | IShares MSCI vs. iShares Russell 2000 | IShares MSCI vs. iShares MSCI Japan |
| Barclays ETN vs. Freedom Day Dividend | Barclays ETN vs. iShares MSCI China | Barclays ETN vs. SmartETFs Dividend Builder | Barclays ETN vs. Tidal ETF Trust |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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