Correlation Between IShares Core and Inspire International
Can any of the company-specific risk be diversified away by investing in both IShares Core and Inspire International 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 Inspire International 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 Inspire International ESG, you can compare the effects of market volatilities on IShares Core and Inspire International 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 Inspire International. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Inspire International.
Diversification Opportunities for IShares Core and Inspire International
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Inspire is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and Inspire International ESG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspire International ESG 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 Inspire International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspire International ESG has no effect on the direction of IShares Core i.e., IShares Core and Inspire International go up and down completely randomly.
Pair Corralation between IShares Core and Inspire International
Given the investment horizon of 90 days iShares Core MSCI is expected to generate 0.97 times more return on investment than Inspire International. However, iShares Core MSCI is 1.04 times less risky than Inspire International. It trades about 0.05 of its potential returns per unit of risk. Inspire International ESG is currently generating about 0.05 per unit of risk. If you would invest 5,944 in iShares Core MSCI on August 30, 2024 and sell it today you would earn a total of 1,314 from holding iShares Core MSCI or generate 22.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core MSCI vs. Inspire International ESG
Performance |
| Timeline |
| iShares Core MSCI |
| Inspire International ESG |
IShares Core and Inspire International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Inspire International
The main advantage of trading using opposite IShares Core and Inspire International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Inspire International 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 Inspire International will offset losses from the drop in Inspire International's long position.| IShares Core vs. iShares Core MSCI | IShares Core vs. iShares Core SP | IShares Core vs. iShares Core SP | IShares Core vs. iShares Core SP |
| Inspire International vs. Northern Lights | Inspire International vs. Inspire SmallMid Cap | Inspire International vs. Inspire Global Hope | Inspire International vs. Inspire Tactical Balanced |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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