Correlation Between IShares MSCI and IShares SP
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and IShares SP 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 MSCI and IShares SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI Emerging and iShares SP 500, you can compare the effects of market volatilities on IShares MSCI and IShares SP 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 MSCI with a short position of IShares SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and IShares SP.
Diversification Opportunities for IShares MSCI and IShares SP
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between IShares and IShares is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Emerging and iShares SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SP 500 and IShares MSCI 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 MSCI Emerging are associated (or correlated) with IShares SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SP 500 has no effect on the direction of IShares MSCI i.e., IShares MSCI and IShares SP go up and down completely randomly.
Pair Corralation between IShares MSCI and IShares SP
Assuming the 90 days trading horizon IShares MSCI is expected to generate 1.14 times less return on investment than IShares SP. In addition to that, IShares MSCI is 1.11 times more volatile than iShares SP 500. It trades about 0.16 of its total potential returns per unit of risk. iShares SP 500 is currently generating about 0.2 per unit of volatility. If you would invest 5,388 in iShares SP 500 on November 4, 2024 and sell it today you would earn a total of 188.00 from holding iShares SP 500 or generate 3.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI Emerging vs. iShares SP 500
Performance |
| Timeline |
| iShares MSCI Emerging |
| iShares SP 500 |
IShares MSCI and IShares SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and IShares SP
The main advantage of trading using opposite IShares MSCI and IShares SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, IShares SP 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 SP will offset losses from the drop in IShares SP's long position.| IShares MSCI vs. iShares Global Aggregate | IShares MSCI vs. iShares CoreSP MidCap | IShares MSCI vs. iShares SP 500 | IShares MSCI vs. iShares Core MSCI |
| IShares SP vs. Betashares Asia Technology | IShares SP vs. CD Private Equity | IShares SP vs. BetaShares Australia 200 | IShares SP vs. Australian High Interest |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |