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 Guru and iShares MSCI USA, 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
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and IShares is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Global X Guru and iShares MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI USA 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 Guru 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 USA 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 Guru is expected to generate 1.12 times more return on investment than IShares MSCI. However, Global X is 1.12 times more volatile than iShares MSCI USA. It trades about 0.2 of its potential returns per unit of risk. iShares MSCI USA is currently generating about 0.11 per unit of risk. If you would invest 4,239 in Global X Guru on September 1, 2024 and sell it today you would earn a total of 1,080 from holding Global X Guru or generate 25.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Global X Guru vs. iShares MSCI USA
Performance |
| Timeline |
| Global X Guru |
| iShares MSCI USA |
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. Global X Millennials | Global X vs. Global X Social | Global X vs. iShares Core Moderate | Global X vs. SPDR SP Global |
| IShares MSCI vs. Vanguard Total Stock | IShares MSCI vs. SPDR SP 500 | IShares MSCI vs. iShares Core SP | IShares MSCI vs. Vanguard Dividend Appreciation |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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