Correlation Between IShares MSCI and Columbia India
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and Columbia India 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 Columbia India into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI India and Columbia India Consumer, you can compare the effects of market volatilities on IShares MSCI and Columbia India 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 Columbia India. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Columbia India.
Diversification Opportunities for IShares MSCI and Columbia India
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Columbia is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI India and Columbia India Consumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia India Consumer 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 India are associated (or correlated) with Columbia India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia India Consumer has no effect on the direction of IShares MSCI i.e., IShares MSCI and Columbia India go up and down completely randomly.
Pair Corralation between IShares MSCI and Columbia India
Given the investment horizon of 90 days iShares MSCI India is expected to generate 0.78 times more return on investment than Columbia India. However, iShares MSCI India is 1.28 times less risky than Columbia India. It trades about -0.22 of its potential returns per unit of risk. Columbia India Consumer is currently generating about -0.19 per unit of risk. If you would invest 5,468 in iShares MSCI India on November 3, 2024 and sell it today you would lose (369.00) from holding iShares MSCI India or give up 6.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 97.56% |
| Values | Daily Returns |
iShares MSCI India vs. Columbia India Consumer
Performance |
| Timeline |
| iShares MSCI India |
| Columbia India Consumer |
IShares MSCI and Columbia India Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and Columbia India
The main advantage of trading using opposite IShares MSCI and Columbia India positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, Columbia India 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 Columbia India will offset losses from the drop in Columbia India's long position.| IShares MSCI vs. iShares India 50 | IShares MSCI vs. iShares MSCI China | IShares MSCI vs. VanEck Vietnam ETF | IShares MSCI vs. WisdomTree India Earnings |
| Columbia India vs. iShares MSCI India | Columbia India vs. iShares India 50 | Columbia India vs. Invesco India ETF | Columbia India vs. WisdomTree India Earnings |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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