Correlation Between IShares Global and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both IShares Global 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 Global 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 Global Industrials and iShares MSCI Kokusai, you can compare the effects of market volatilities on IShares Global 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 Global with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and IShares MSCI.
Diversification Opportunities for IShares Global and IShares MSCI
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and IShares is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Industrials and iShares MSCI Kokusai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Kokusai and IShares Global 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 Global Industrials 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 Kokusai has no effect on the direction of IShares Global i.e., IShares Global and IShares MSCI go up and down completely randomly.
Pair Corralation between IShares Global and IShares MSCI
Considering the 90-day investment horizon IShares Global is expected to generate 1.02 times less return on investment than IShares MSCI. In addition to that, IShares Global is 1.23 times more volatile than iShares MSCI Kokusai. It trades about 0.14 of its total potential returns per unit of risk. iShares MSCI Kokusai is currently generating about 0.18 per unit of volatility. If you would invest 11,217 in iShares MSCI Kokusai on September 2, 2024 and sell it today you would earn a total of 823.00 from holding iShares MSCI Kokusai or generate 7.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global Industrials vs. iShares MSCI Kokusai
Performance |
| Timeline |
| iShares Global Indus |
| iShares MSCI Kokusai |
IShares Global and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and IShares MSCI
The main advantage of trading using opposite IShares Global and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global 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 Global vs. Industrial Select Sector | IShares Global vs. Driven Brands Holdings | IShares Global vs. iShares Industrials ETF | IShares Global vs. iShares Transportation Average |
| IShares MSCI vs. iShares MSCI Japan | IShares MSCI vs. iShares Global Consumer | IShares MSCI vs. iShares Global Industrials | IShares MSCI vs. iShares GovernmentCredit Bond |
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 CEOs Directory module to screen CEOs from public companies around the world.
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