Correlation Between IShares MSCI and Litman Gregory
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and Litman Gregory 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 Litman Gregory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI South and Litman Gregory Funds, you can compare the effects of market volatilities on IShares MSCI and Litman Gregory 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 Litman Gregory. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Litman Gregory.
Diversification Opportunities for IShares MSCI and Litman Gregory
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between IShares and Litman is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI South and Litman Gregory Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Litman Gregory Funds 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 South are associated (or correlated) with Litman Gregory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Litman Gregory Funds has no effect on the direction of IShares MSCI i.e., IShares MSCI and Litman Gregory go up and down completely randomly.
Pair Corralation between IShares MSCI and Litman Gregory
Considering the 90-day investment horizon iShares MSCI South is expected to under-perform the Litman Gregory. But the etf apears to be less risky and, when comparing its historical volatility, iShares MSCI South is 1.4 times less risky than Litman Gregory. The etf trades about -0.12 of its potential returns per unit of risk. The Litman Gregory Funds is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 1,156 in Litman Gregory Funds on September 1, 2024 and sell it today you would lose (37.00) from holding Litman Gregory Funds or give up 3.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
iShares MSCI South vs. Litman Gregory Funds
Performance |
| Timeline |
| iShares MSCI South |
| Litman Gregory Funds |
IShares MSCI and Litman Gregory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and Litman Gregory
The main advantage of trading using opposite IShares MSCI and Litman Gregory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, Litman Gregory 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 Litman Gregory will offset losses from the drop in Litman Gregory's long position.| IShares MSCI vs. iShares MSCI Taiwan | IShares MSCI vs. iShares MSCI Singapore | IShares MSCI vs. iShares MSCI Mexico | IShares MSCI vs. iShares MSCI Hong |
| Litman Gregory vs. Freedom Day Dividend | Litman Gregory vs. iShares MSCI China | Litman Gregory vs. iShares Dividend and | Litman Gregory vs. SmartETFs Dividend Builder |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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