Correlation Between IShares MSCI and VanEck Israel
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and VanEck Israel 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 VanEck Israel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI Poland and VanEck Israel ETF, you can compare the effects of market volatilities on IShares MSCI and VanEck Israel 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 VanEck Israel. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and VanEck Israel.
Diversification Opportunities for IShares MSCI and VanEck Israel
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and VanEck is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Poland and VanEck Israel ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Israel 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 Poland are associated (or correlated) with VanEck Israel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Israel ETF has no effect on the direction of IShares MSCI i.e., IShares MSCI and VanEck Israel go up and down completely randomly.
Pair Corralation between IShares MSCI and VanEck Israel
Given the investment horizon of 90 days iShares MSCI Poland is expected to under-perform the VanEck Israel. In addition to that, IShares MSCI is 1.88 times more volatile than VanEck Israel ETF. It trades about -0.02 of its total potential returns per unit of risk. VanEck Israel ETF is currently generating about 0.41 per unit of volatility. If you would invest 3,971 in VanEck Israel ETF on September 1, 2024 and sell it today you would earn a total of 320.00 from holding VanEck Israel ETF or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
iShares MSCI Poland vs. VanEck Israel ETF
Performance |
| Timeline |
| iShares MSCI Poland |
| VanEck Israel ETF |
IShares MSCI and VanEck Israel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and VanEck Israel
The main advantage of trading using opposite IShares MSCI and VanEck Israel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, VanEck Israel 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 VanEck Israel will offset losses from the drop in VanEck Israel's long position.| IShares MSCI vs. iShares MSCI Philippines | IShares MSCI vs. iShares MSCI Indonesia | IShares MSCI vs. iShares MSCI Peru | IShares MSCI vs. iShares MSCI Ireland |
| VanEck Israel vs. Amplify ETF Trust | VanEck Israel vs. iShares MSCI Israel | VanEck Israel vs. FlexShares International Quality | VanEck Israel vs. VanEck Morningstar International |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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