Correlation Between IShares Core and Xtrackers MSCI
Can any of the company-specific risk be diversified away by investing in both IShares Core and Xtrackers 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 Core and Xtrackers MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core High and Xtrackers MSCI EAFE, you can compare the effects of market volatilities on IShares Core and Xtrackers 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 Core with a short position of Xtrackers MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Xtrackers MSCI.
Diversification Opportunities for IShares Core and Xtrackers MSCI
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and Xtrackers is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core High and Xtrackers MSCI EAFE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers MSCI EAFE and IShares Core 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 Core High are associated (or correlated) with Xtrackers MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers MSCI EAFE has no effect on the direction of IShares Core i.e., IShares Core and Xtrackers MSCI go up and down completely randomly.
Pair Corralation between IShares Core and Xtrackers MSCI
Considering the 90-day investment horizon iShares Core High is expected to generate 0.62 times more return on investment than Xtrackers MSCI. However, iShares Core High is 1.61 times less risky than Xtrackers MSCI. It trades about 0.3 of its potential returns per unit of risk. Xtrackers MSCI EAFE is currently generating about -0.08 per unit of risk. If you would invest 11,728 in iShares Core High on September 3, 2024 and sell it today you would earn a total of 400.00 from holding iShares Core High or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core High vs. Xtrackers MSCI EAFE
Performance |
| Timeline |
| iShares Core High |
| Xtrackers MSCI EAFE |
IShares Core and Xtrackers MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Xtrackers MSCI
The main advantage of trading using opposite IShares Core and Xtrackers MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Xtrackers 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 Xtrackers MSCI will offset losses from the drop in Xtrackers MSCI's long position.| IShares Core vs. Global X Funds | IShares Core vs. Dell Technologies | IShares Core vs. Juniper Networks | IShares Core vs. HUMANA INC |
| Xtrackers MSCI vs. iShares MSCI EAFE | Xtrackers MSCI vs. Vanguard International High | Xtrackers MSCI vs. iShares International Select | Xtrackers MSCI vs. Hartford Multifactor Developed |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |