Correlation Between BetaPro SP and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both BetaPro SP 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 BetaPro SP and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro SP 500 and iShares MSCI USA, you can compare the effects of market volatilities on BetaPro SP 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 BetaPro SP with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SP and IShares MSCI.
Diversification Opportunities for BetaPro SP and IShares MSCI
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BetaPro and IShares is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SP 500 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 BetaPro SP 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 BetaPro SP 500 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 BetaPro SP i.e., BetaPro SP and IShares MSCI go up and down completely randomly.
Pair Corralation between BetaPro SP and IShares MSCI
Assuming the 90 days trading horizon BetaPro SP 500 is expected to under-perform the IShares MSCI. But the etf apears to be less risky and, when comparing its historical volatility, BetaPro SP 500 is 1.09 times less risky than IShares MSCI. The etf trades about -0.04 of its potential returns per unit of risk. The iShares MSCI USA is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2,858 in iShares MSCI USA on October 24, 2024 and sell it today you would earn a total of 127.00 from holding iShares MSCI USA or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro SP 500 vs. iShares MSCI USA
Performance |
| Timeline |
| BetaPro SP 500 |
| iShares MSCI USA |
BetaPro SP and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro SP and IShares MSCI
The main advantage of trading using opposite BetaPro SP and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro SP 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.| BetaPro SP vs. BetaPro SPTSX 60 | BetaPro SP vs. BetaPro NASDAQ 100 2x | BetaPro SP vs. BetaPro SP 500 | BetaPro SP vs. BetaPro Gold Bullion |
| IShares MSCI vs. NBI Sustainable Global | IShares MSCI vs. NBI Active Canadian | IShares MSCI vs. NBI Liquid Alternatives | IShares MSCI vs. NBI Global Real |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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