Correlation Between US Global and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both US 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 US 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 US Global GO and iShares MSCI Global, you can compare the effects of market volatilities on US 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 US Global with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Global and IShares MSCI.
Diversification Opportunities for US Global and IShares MSCI
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GOAU and IShares is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding US Global GO and iShares MSCI Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Global and US 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 US Global GO 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 Global has no effect on the direction of US Global i.e., US Global and IShares MSCI go up and down completely randomly.
Pair Corralation between US Global and IShares MSCI
Given the investment horizon of 90 days US Global GO is expected to generate 0.86 times more return on investment than IShares MSCI. However, US Global GO is 1.16 times less risky than IShares MSCI. It trades about 0.03 of its potential returns per unit of risk. iShares MSCI Global is currently generating about 0.02 per unit of risk. If you would invest 1,685 in US Global GO on August 31, 2024 and sell it today you would earn a total of 416.00 from holding US Global GO or generate 24.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Global GO vs. iShares MSCI Global
Performance |
| Timeline |
| US Global GO |
| iShares MSCI Global |
US Global and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Global and IShares MSCI
The main advantage of trading using opposite US Global and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US 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.| US Global vs. Sprott Gold Miners | US Global vs. Global X Gold | US Global vs. Sprott Junior Gold | US Global vs. Amplify ETF Trust |
| IShares MSCI vs. iShares MSCI Global | IShares MSCI vs. Amplify ETF Trust | IShares MSCI vs. Global X Silver | IShares MSCI vs. iShares MSCI Global |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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