Correlation Between IShares MSCI and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both IShares MSCI 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 IShares MSCI and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI Philippines and iShares MSCI Hong, you can compare the effects of market volatilities on IShares MSCI 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 IShares MSCI with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and IShares MSCI.
Diversification Opportunities for IShares MSCI and IShares MSCI
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IShares and IShares is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Philippines and iShares MSCI Hong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Hong 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 Philippines 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 Hong has no effect on the direction of IShares MSCI i.e., IShares MSCI and IShares MSCI go up and down completely randomly.
Pair Corralation between IShares MSCI and IShares MSCI
Given the investment horizon of 90 days IShares MSCI is expected to generate 3.34 times less return on investment than IShares MSCI. But when comparing it to its historical volatility, iShares MSCI Philippines is 1.53 times less risky than IShares MSCI. It trades about 0.01 of its potential returns per unit of risk. iShares MSCI Hong is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,645 in iShares MSCI Hong on September 12, 2024 and sell it today you would earn a total of 114.00 from holding iShares MSCI Hong or generate 6.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI Philippines vs. iShares MSCI Hong
Performance |
| Timeline |
| iShares MSCI Philippines |
| iShares MSCI Hong |
IShares MSCI and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and IShares MSCI
The main advantage of trading using opposite IShares MSCI and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI 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.The idea behind iShares MSCI Philippines and iShares MSCI Hong 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.| IShares MSCI vs. KraneShares CSI China | IShares MSCI vs. Invesco China Technology | IShares MSCI vs. iShares MSCI India | IShares MSCI vs. Xtrackers Harvest CSI |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |