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 United and iShares MSCI Pacific, 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
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between IShares and IShares is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI United and iShares MSCI Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Pacific 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 United 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 Pacific 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 United is expected to under-perform the IShares MSCI. But the etf apears to be less risky and, when comparing its historical volatility, iShares MSCI United is 1.26 times less risky than IShares MSCI. The etf trades about -0.19 of its potential returns per unit of risk. The iShares MSCI Pacific is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,675 in iShares MSCI Pacific on August 24, 2024 and sell it today you would earn a total of 52.00 from holding iShares MSCI Pacific or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI United vs. iShares MSCI Pacific
Performance |
| Timeline |
| iShares MSCI United |
| iShares MSCI Pacific |
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. WisdomTree Europe Hedged | IShares MSCI vs. Global X MSCI | IShares MSCI vs. Vanguard Total Bond | IShares MSCI vs. iShares MSCI Germany |
| IShares MSCI vs. iShares Latin America | IShares MSCI vs. iShares Europe ETF | IShares MSCI vs. iShares MSCI Malaysia | IShares MSCI vs. iShares MSCI Sweden |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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