Correlation Between IShares MSCI and IShares Currency
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and IShares Currency 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 Currency into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI Netherlands and iShares Currency Hedged, you can compare the effects of market volatilities on IShares MSCI and IShares Currency 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 Currency. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and IShares Currency.
Diversification Opportunities for IShares MSCI and IShares Currency
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and IShares is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Netherlands and iShares Currency Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Currency Hedged 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 Netherlands are associated (or correlated) with IShares Currency. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Currency Hedged has no effect on the direction of IShares MSCI i.e., IShares MSCI and IShares Currency go up and down completely randomly.
Pair Corralation between IShares MSCI and IShares Currency
Considering the 90-day investment horizon iShares MSCI Netherlands is expected to under-perform the IShares Currency. In addition to that, IShares MSCI is 1.34 times more volatile than iShares Currency Hedged. It trades about -0.11 of its total potential returns per unit of risk. iShares Currency Hedged is currently generating about 0.03 per unit of volatility. If you would invest 3,555 in iShares Currency Hedged on September 1, 2024 and sell it today you would earn a total of 15.00 from holding iShares Currency Hedged or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
iShares MSCI Netherlands vs. iShares Currency Hedged
Performance |
| Timeline |
| iShares MSCI Netherlands |
| iShares Currency Hedged |
IShares MSCI and IShares Currency Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and IShares Currency
The main advantage of trading using opposite IShares MSCI and IShares Currency positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, IShares Currency 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 Currency will offset losses from the drop in IShares Currency's long position.| IShares MSCI vs. iShares MSCI Belgium | IShares MSCI vs. iShares MSCI Sweden | IShares MSCI vs. iShares MSCI France | IShares MSCI vs. iShares MSCI Switzerland |
| IShares Currency vs. Pacer Trendpilot Mid | IShares Currency vs. Pacer Trendpilot Large | IShares Currency vs. Pacer Trendpilot 100 | IShares Currency vs. Pacer Trendpilot 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |