Correlation Between IShares Core and Capital Group
Can any of the company-specific risk be diversified away by investing in both IShares Core and Capital Group 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 Capital Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core MSCI and Capital Group International, you can compare the effects of market volatilities on IShares Core and Capital Group 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 Capital Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Capital Group.
Diversification Opportunities for IShares Core and Capital Group
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Capital is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and Capital Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Group Intern 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 MSCI are associated (or correlated) with Capital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Group Intern has no effect on the direction of IShares Core i.e., IShares Core and Capital Group go up and down completely randomly.
Pair Corralation between IShares Core and Capital Group
Given the investment horizon of 90 days iShares Core MSCI is expected to generate 0.94 times more return on investment than Capital Group. However, iShares Core MSCI is 1.06 times less risky than Capital Group. It trades about 0.05 of its potential returns per unit of risk. Capital Group International is currently generating about 0.02 per unit of risk. If you would invest 5,599 in iShares Core MSCI on November 9, 2024 and sell it today you would earn a total of 1,226 from holding iShares Core MSCI or generate 21.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 31.24% |
| Values | Daily Returns |
iShares Core MSCI vs. Capital Group International
Performance |
| Timeline |
| iShares Core MSCI |
| Capital Group Intern |
IShares Core and Capital Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Capital Group
The main advantage of trading using opposite IShares Core and Capital Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Capital Group 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 Capital Group will offset losses from the drop in Capital Group's long position.| IShares Core vs. Horizon Kinetics Medical | IShares Core vs. Genenta Science SpA | IShares Core vs. ESSA Pharma | IShares Core vs. Inogen Inc |
| Capital Group vs. Davis Select International | Capital Group vs. Tidal ETF Trust | Capital Group vs. Principal Value ETF | Capital Group vs. WisdomTree Emerging Markets |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |