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 Australia and iShares MSCI United, 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
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and IShares is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Australia and iShares MSCI United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI United 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 Australia 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 United 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
Considering the 90-day investment horizon iShares MSCI Australia is expected to generate 1.28 times more return on investment than IShares MSCI. However, IShares MSCI is 1.28 times more volatile than iShares MSCI United. It trades about -0.01 of its potential returns per unit of risk. iShares MSCI United is currently generating about -0.18 per unit of risk. If you would invest 2,644 in iShares MSCI Australia on August 26, 2024 and sell it today you would lose (12.00) from holding iShares MSCI Australia or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI Australia vs. iShares MSCI United
Performance |
| Timeline |
| iShares MSCI Australia |
| iShares MSCI United |
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.| IShares MSCI vs. iShares MSCI Canada | IShares MSCI vs. iShares MSCI Singapore | IShares MSCI vs. iShares MSCI Malaysia | IShares MSCI vs. iShares MSCI Germany |
| IShares MSCI vs. iShares MSCI Hong | IShares MSCI vs. HUMANA INC | IShares MSCI vs. SCOR PK | IShares MSCI vs. Aquagold 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |