Correlation Between IShares UBS and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both IShares UBS and SPDR 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 UBS and SPDR MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares UBS Government and SPDR MSCI World, you can compare the effects of market volatilities on IShares UBS and SPDR 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 UBS with a short position of SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares UBS and SPDR MSCI.
Diversification Opportunities for IShares UBS and SPDR MSCI
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and SPDR is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding iShares UBS Government and SPDR MSCI World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI World and IShares UBS 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 UBS Government are associated (or correlated) with SPDR MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI World has no effect on the direction of IShares UBS i.e., IShares UBS and SPDR MSCI go up and down completely randomly.
Pair Corralation between IShares UBS and SPDR MSCI
Assuming the 90 days trading horizon IShares UBS is expected to generate 10.82 times less return on investment than SPDR MSCI. But when comparing it to its historical volatility, iShares UBS Government is 1.64 times less risky than SPDR MSCI. It trades about 0.01 of its potential returns per unit of risk. SPDR MSCI World is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,257 in SPDR MSCI World on August 26, 2024 and sell it today you would earn a total of 926.00 from holding SPDR MSCI World or generate 41.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares UBS Government vs. SPDR MSCI World
Performance |
| Timeline |
| iShares UBS Government |
| SPDR MSCI World |
IShares UBS and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares UBS and SPDR MSCI
The main advantage of trading using opposite IShares UBS and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares UBS position performs unexpectedly, SPDR 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 SPDR MSCI will offset losses from the drop in SPDR MSCI's long position.| IShares UBS vs. Vanguard Total Market | IShares UBS vs. SPDR SP 500 | IShares UBS vs. iShares Core SP | IShares UBS vs. iShares Core SP |
| SPDR MSCI vs. BetaShares Global Banks | SPDR MSCI vs. Beta Shares SPASX | SPDR MSCI vs. SPDR SPASX 200 | SPDR MSCI vs. Vanguard Australian Property |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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