Correlation Between IShares France and IShares Core
Can any of the company-specific risk be diversified away by investing in both IShares France and IShares Core 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 France and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares France Govt and iShares Core MSCI, you can compare the effects of market volatilities on IShares France and IShares Core 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 France with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares France and IShares Core.
Diversification Opportunities for IShares France and IShares Core
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and IShares is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding iShares France Govt and iShares Core MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core MSCI and IShares France 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 France Govt are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core MSCI has no effect on the direction of IShares France i.e., IShares France and IShares Core go up and down completely randomly.
Pair Corralation between IShares France and IShares Core
Assuming the 90 days trading horizon iShares France Govt is expected to generate 0.32 times more return on investment than IShares Core. However, iShares France Govt is 3.17 times less risky than IShares Core. It trades about 0.08 of its potential returns per unit of risk. iShares Core MSCI is currently generating about -0.05 per unit of risk. If you would invest 13,018 in iShares France Govt on August 28, 2024 and sell it today you would earn a total of 55.00 from holding iShares France Govt or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares France Govt vs. iShares Core MSCI
Performance |
| Timeline |
| iShares France Govt |
| iShares Core MSCI |
IShares France and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares France and IShares Core
The main advantage of trading using opposite IShares France and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares France position performs unexpectedly, IShares Core 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 Core will offset losses from the drop in IShares Core's long position.| IShares France vs. SPDR Dow Jones | IShares France vs. iShares SP 500 | IShares France vs. iShares China CNY | IShares France vs. iShares Core MSCI |
| IShares Core vs. SPDR Dow Jones | IShares Core vs. iShares SP 500 | IShares Core vs. iShares China CNY | IShares Core vs. iShares Core MSCI |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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