Correlation Between IShares MSCI and IQ Candriam
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and IQ Candriam 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 IQ Candriam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI Intl and IQ Candriam ESG, you can compare the effects of market volatilities on IShares MSCI and IQ Candriam 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 IQ Candriam. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and IQ Candriam.
Diversification Opportunities for IShares MSCI and IQ Candriam
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and IQSI is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Intl and IQ Candriam ESG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ Candriam ESG 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 Intl are associated (or correlated) with IQ Candriam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ Candriam ESG has no effect on the direction of IShares MSCI i.e., IShares MSCI and IQ Candriam go up and down completely randomly.
Pair Corralation between IShares MSCI and IQ Candriam
Given the investment horizon of 90 days iShares MSCI Intl is expected to generate 1.3 times more return on investment than IQ Candriam. However, IShares MSCI is 1.3 times more volatile than IQ Candriam ESG. It trades about 0.03 of its potential returns per unit of risk. IQ Candriam ESG is currently generating about 0.03 per unit of risk. If you would invest 3,815 in iShares MSCI Intl on September 12, 2024 and sell it today you would earn a total of 140.00 from holding iShares MSCI Intl or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI Intl vs. IQ Candriam ESG
Performance |
| Timeline |
| iShares MSCI Intl |
| IQ Candriam ESG |
IShares MSCI and IQ Candriam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and IQ Candriam
The main advantage of trading using opposite IShares MSCI and IQ Candriam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, IQ Candriam 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 IQ Candriam will offset losses from the drop in IQ Candriam's long position.| IShares MSCI vs. iShares MSCI Intl | IShares MSCI vs. iShares Currency Hedged | IShares MSCI vs. iShares Edge MSCI |
| IQ Candriam vs. iShares MSCI Intl | IQ Candriam vs. iShares MSCI Intl | IQ Candriam vs. iShares Currency Hedged | IQ Candriam vs. iShares Edge 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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