Correlation Between EMCS and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both EMCS 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 EMCS and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMCS and iShares MSCI Emerging, you can compare the effects of market volatilities on EMCS 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 EMCS with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMCS and IShares MSCI.
Diversification Opportunities for EMCS and IShares MSCI
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between EMCS and IShares is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding EMCS and iShares MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Emerging and EMCS 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 EMCS 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 Emerging has no effect on the direction of EMCS i.e., EMCS and IShares MSCI go up and down completely randomly.
Pair Corralation between EMCS and IShares MSCI
Given the investment horizon of 90 days EMCS is expected to generate 0.81 times more return on investment than IShares MSCI. However, EMCS is 1.24 times less risky than IShares MSCI. It trades about 0.06 of its potential returns per unit of risk. iShares MSCI Emerging is currently generating about 0.04 per unit of risk. If you would invest 2,315 in EMCS on August 26, 2024 and sell it today you would earn a total of 352.00 from holding EMCS or generate 15.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 22.89% |
| Values | Daily Returns |
EMCS vs. iShares MSCI Emerging
Performance |
| Timeline |
| EMCS |
| iShares MSCI Emerging |
EMCS and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMCS and IShares MSCI
The main advantage of trading using opposite EMCS and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMCS 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.| EMCS vs. Invesco PureBeta MSCI | EMCS vs. Aquagold International | EMCS vs. Morningstar Unconstrained Allocation | EMCS vs. High Yield Municipal Fund |
| IShares MSCI vs. Cambria Micro And | IShares MSCI vs. Invesco Actively Managed | IShares MSCI vs. iShares Trust | IShares MSCI vs. EMCS |
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.
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