Correlation Between International Business and ProShares MSCI
Can any of the company-specific risk be diversified away by investing in both International Business and ProShares 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 International Business and ProShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Business Machines and ProShares MSCI Emerging, you can compare the effects of market volatilities on International Business and ProShares 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 International Business with a short position of ProShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and ProShares MSCI.
Diversification Opportunities for International Business and ProShares MSCI
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between International and ProShares is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and ProShares MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares MSCI Emerging and International Business 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 International Business Machines are associated (or correlated) with ProShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares MSCI Emerging has no effect on the direction of International Business i.e., International Business and ProShares MSCI go up and down completely randomly.
Pair Corralation between International Business and ProShares MSCI
Considering the 90-day investment horizon International Business Machines is expected to generate 1.18 times more return on investment than ProShares MSCI. However, International Business is 1.18 times more volatile than ProShares MSCI Emerging. It trades about 0.22 of its potential returns per unit of risk. ProShares MSCI Emerging is currently generating about -0.15 per unit of risk. If you would invest 21,125 in International Business Machines on August 28, 2024 and sell it today you would earn a total of 1,488 from holding International Business Machines or generate 7.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Business Machine vs. ProShares MSCI Emerging
Performance |
| Timeline |
| International Business |
| ProShares MSCI Emerging |
International Business and ProShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and ProShares MSCI
The main advantage of trading using opposite International Business and ProShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, ProShares 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 ProShares MSCI will offset losses from the drop in ProShares MSCI's long position.| International Business vs. Data Storage Corp | International Business vs. Usio Inc | International Business vs. ARB IOT Group | International Business vs. FiscalNote Holdings |
| ProShares MSCI vs. Invesco PureBeta MSCI | ProShares MSCI vs. Aquagold International | ProShares MSCI vs. Morningstar Unconstrained Allocation | ProShares MSCI vs. High Yield Municipal Fund |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |