Correlation Between IShares MSCI and Listed Funds
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and Listed Funds 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 Listed Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI Frontier and Listed Funds Trust, you can compare the effects of market volatilities on IShares MSCI and Listed Funds 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 Listed Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Listed Funds.
Diversification Opportunities for IShares MSCI and Listed Funds
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IShares and Listed is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Frontier and Listed Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Listed Funds Trust 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 Frontier are associated (or correlated) with Listed Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Listed Funds Trust has no effect on the direction of IShares MSCI i.e., IShares MSCI and Listed Funds go up and down completely randomly.
Pair Corralation between IShares MSCI and Listed Funds
Allowing for the 90-day total investment horizon IShares MSCI is expected to generate 1.89 times less return on investment than Listed Funds. But when comparing it to its historical volatility, iShares MSCI Frontier is 1.02 times less risky than Listed Funds. It trades about 0.03 of its potential returns per unit of risk. Listed Funds Trust is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,770 in Listed Funds Trust on August 24, 2024 and sell it today you would earn a total of 630.00 from holding Listed Funds Trust or generate 22.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI Frontier vs. Listed Funds Trust
Performance |
| Timeline |
| iShares MSCI Frontier |
| Listed Funds Trust |
IShares MSCI and Listed Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and Listed Funds
The main advantage of trading using opposite IShares MSCI and Listed Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, Listed Funds 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 Listed Funds will offset losses from the drop in Listed Funds' long position.| IShares MSCI vs. iShares MSCI Poland | IShares MSCI vs. iShares MSCI Emerging | IShares MSCI vs. iShares MSCI Philippines | IShares MSCI vs. iShares MSCI Indonesia |
| Listed Funds vs. BlackRock ETF Trust | Listed Funds vs. Rbb Fund | Listed Funds vs. Virtus ETF Trust | Listed Funds vs. Amplify CWP Enhanced |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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