Correlation Between Barclays ETN and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both Barclays ETN 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 Barclays ETN and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays ETN FI and iShares MSCI Hong, you can compare the effects of market volatilities on Barclays ETN 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 Barclays ETN with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays ETN and IShares MSCI.
Diversification Opportunities for Barclays ETN and IShares MSCI
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Barclays and IShares is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Barclays ETN FI and iShares MSCI Hong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Hong and Barclays ETN 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 Barclays ETN FI 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 Hong has no effect on the direction of Barclays ETN i.e., Barclays ETN and IShares MSCI go up and down completely randomly.
Pair Corralation between Barclays ETN and IShares MSCI
Given the investment horizon of 90 days Barclays ETN FI is expected to generate 0.66 times more return on investment than IShares MSCI. However, Barclays ETN FI is 1.53 times less risky than IShares MSCI. It trades about 0.02 of its potential returns per unit of risk. iShares MSCI Hong is currently generating about -0.01 per unit of risk. If you would invest 2,299 in Barclays ETN FI on September 1, 2024 and sell it today you would earn a total of 154.00 from holding Barclays ETN FI or generate 6.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Barclays ETN FI vs. iShares MSCI Hong
Performance |
| Timeline |
| Barclays ETN FI |
| iShares MSCI Hong |
Barclays ETN and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays ETN and IShares MSCI
The main advantage of trading using opposite Barclays ETN and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays ETN 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.| Barclays ETN vs. iShares ESG Aggregate | Barclays ETN vs. SPDR MSCI Emerging | Barclays ETN vs. Aquagold International | Barclays ETN vs. Thrivent High Yield |
| IShares MSCI vs. iShares MSCI Singapore | IShares MSCI vs. iShares MSCI Taiwan | IShares MSCI vs. iShares MSCI Malaysia | IShares MSCI vs. iShares MSCI Australia |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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