Correlation Between IShares MSCI and IShares International
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and IShares International 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 International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI Emerging and iShares International Developed, you can compare the effects of market volatilities on IShares MSCI and IShares International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and IShares International.
Diversification Opportunities for IShares MSCI and IShares International
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IShares and IShares is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Emerging and iShares International Develope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares International 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 Emerging are associated (or correlated) with IShares International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares International has no effect on the direction of IShares MSCI i.e., IShares MSCI and IShares International go up and down completely randomly.
Pair Corralation between IShares MSCI and IShares International
Given the investment horizon of 90 days iShares MSCI Emerging is expected to generate 1.34 times more return on investment than IShares International. However, IShares MSCI is 1.34 times more volatile than iShares International Developed. It trades about -0.2 of its potential returns per unit of risk. iShares International Developed is currently generating about -0.36 per unit of risk. If you would invest 2,617 in iShares MSCI Emerging on August 23, 2024 and sell it today you would lose (122.00) from holding iShares MSCI Emerging or give up 4.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI Emerging vs. iShares International Develope
Performance |
| Timeline |
| iShares MSCI Emerging |
| iShares International |
IShares MSCI and IShares International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and IShares International
The main advantage of trading using opposite IShares MSCI and IShares International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, IShares International 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 International will offset losses from the drop in IShares International's long position.| IShares MSCI vs. iShares International Developed | IShares MSCI vs. iShares MSCI Emerging | IShares MSCI vs. iShares MSCI Frontier | IShares MSCI vs. iShares MSCI Emerging |
| IShares International vs. FlexShares Global Quality | IShares International vs. ALPS REIT Dividend | IShares International vs. WisdomTree New Economy | IShares International vs. First Trust RBA |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |