Correlation Between IShares China and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both IShares China 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 China 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 China Large Cap and iShares MSCI Mexico, you can compare the effects of market volatilities on IShares China 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 China with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares China and IShares MSCI.
Diversification Opportunities for IShares China and IShares MSCI
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between IShares and IShares is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding iShares China Large Cap and iShares MSCI Mexico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Mexico and IShares China 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 China Large Cap 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 Mexico has no effect on the direction of IShares China i.e., IShares China and IShares MSCI go up and down completely randomly.
Pair Corralation between IShares China and IShares MSCI
Considering the 90-day investment horizon iShares China Large Cap is expected to generate 1.31 times more return on investment than IShares MSCI. However, IShares China is 1.31 times more volatile than iShares MSCI Mexico. It trades about 0.02 of its potential returns per unit of risk. iShares MSCI Mexico is currently generating about -0.03 per unit of risk. If you would invest 2,749 in iShares China Large Cap on August 31, 2024 and sell it today you would earn a total of 282.00 from holding iShares China Large Cap or generate 10.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares China Large Cap vs. iShares MSCI Mexico
Performance |
| Timeline |
| iShares China Large |
| iShares MSCI Mexico |
IShares China and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares China and IShares MSCI
The main advantage of trading using opposite IShares China and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares China 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 China vs. iShares MSCI Brazil | IShares China vs. iShares MSCI Emerging | IShares China vs. iShares MSCI Japan | IShares China vs. iShares MSCI Hong |
| IShares MSCI vs. iShares MSCI Malaysia | IShares MSCI vs. iShares MSCI South | IShares MSCI vs. iShares MSCI Spain | 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |