Correlation Between IShares MSCI and Global X

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Can any of the company-specific risk be diversified away by investing in both IShares MSCI and Global X 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 Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI Israel and Global X, you can compare the effects of market volatilities on IShares MSCI and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Global X.

Diversification Opportunities for IShares MSCI and Global X

0.54
  Correlation Coefficient

Very weak diversification

The 3 months correlation between IShares and Global is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Israel and Global X in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X 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 Israel are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X has no effect on the direction of IShares MSCI i.e., IShares MSCI and Global X go up and down completely randomly.

Pair Corralation between IShares MSCI and Global X

If you would invest  7,073  in iShares MSCI Israel on September 13, 2024 and sell it today you would earn a total of  642.00  from holding iShares MSCI Israel or generate 9.08% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy4.55%
ValuesDaily Returns

iShares MSCI Israel  vs.  Global X

 Performance 
       Timeline  
iShares MSCI Israel 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI Israel are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady forward indicators, IShares MSCI unveiled solid returns over the last few months and may actually be approaching a breakup point.
Global X 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Global X has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Global X is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

IShares MSCI and Global X Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IShares MSCI and Global X

The main advantage of trading using opposite IShares MSCI and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.
The idea behind iShares MSCI Israel and Global X 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.
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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