Correlation Between IShares Utilities and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both IShares Utilities 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 IShares Utilities and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Utilities ETF and iShares MSCI Pacific, you can compare the effects of market volatilities on IShares Utilities 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 IShares Utilities with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Utilities and IShares MSCI.
Diversification Opportunities for IShares Utilities and IShares MSCI
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and IShares is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding iShares Utilities ETF and iShares MSCI Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Pacific and IShares Utilities 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 Utilities ETF 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 Pacific has no effect on the direction of IShares Utilities i.e., IShares Utilities and IShares MSCI go up and down completely randomly.
Pair Corralation between IShares Utilities and IShares MSCI
Considering the 90-day investment horizon iShares Utilities ETF is expected to under-perform the IShares MSCI. In addition to that, IShares Utilities is 1.06 times more volatile than iShares MSCI Pacific. It trades about 0.0 of its total potential returns per unit of risk. iShares MSCI Pacific is currently generating about 0.05 per unit of volatility. If you would invest 4,675 in iShares MSCI Pacific on August 24, 2024 and sell it today you would earn a total of 52.00 from holding iShares MSCI Pacific or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Utilities ETF vs. iShares MSCI Pacific
Performance |
| Timeline |
| iShares Utilities ETF |
| iShares MSCI Pacific |
IShares Utilities and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Utilities and IShares MSCI
The main advantage of trading using opposite IShares Utilities and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Utilities 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.| IShares Utilities vs. iShares Industrials ETF | IShares Utilities vs. iShares Consumer Discretionary | IShares Utilities vs. iShares Consumer Staples | IShares Utilities vs. iShares Telecommunications ETF |
| IShares MSCI vs. iShares Latin America | IShares MSCI vs. iShares Europe ETF | IShares MSCI vs. iShares MSCI Malaysia | IShares MSCI vs. iShares MSCI Sweden |
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
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |