Correlation Between Global X and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both Global X 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 Global X and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X MSCI and iShares MSCI Peru, you can compare the effects of market volatilities on Global X 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 Global X with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and IShares MSCI.
Diversification Opportunities for Global X and IShares MSCI
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and IShares is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Global X MSCI and iShares MSCI Peru in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Peru and Global X 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 Global X MSCI 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 Peru has no effect on the direction of Global X i.e., Global X and IShares MSCI go up and down completely randomly.
Pair Corralation between Global X and IShares MSCI
Given the investment horizon of 90 days Global X is expected to generate 2.88 times less return on investment than IShares MSCI. In addition to that, Global X is 1.02 times more volatile than iShares MSCI Peru. It trades about 0.03 of its total potential returns per unit of risk. iShares MSCI Peru is currently generating about 0.09 per unit of volatility. If you would invest 2,908 in iShares MSCI Peru on September 1, 2024 and sell it today you would earn a total of 1,356 from holding iShares MSCI Peru or generate 46.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Global X MSCI vs. iShares MSCI Peru
Performance |
| Timeline |
| Global X MSCI |
| iShares MSCI Peru |
Global X and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and IShares MSCI
The main advantage of trading using opposite Global X and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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.| Global X vs. iShares MSCI Italy | Global X vs. Global X MSCI | Global X vs. iShares MSCI Spain | Global X vs. iShares MSCI Turkey |
| IShares MSCI vs. iShares MSCI Chile | IShares MSCI vs. Global X MSCI | IShares MSCI vs. iShares MSCI Thailand | IShares MSCI vs. iShares MSCI Philippines |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |