Correlation Between IShares Trust and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both IShares Trust and IShares 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 Trust and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and iShares MSCI Netherlands, you can compare the effects of market volatilities on IShares Trust and IShares 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 Trust with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and IShares MSCI.
Diversification Opportunities for IShares Trust and IShares MSCI
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and IShares is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and iShares MSCI Netherlands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Netherlands and IShares Trust 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 Trust are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI Netherlands has no effect on the direction of IShares Trust i.e., IShares Trust and IShares MSCI go up and down completely randomly.
Pair Corralation between IShares Trust and IShares MSCI
Assuming the 90 days trading horizon IShares Trust is expected to generate 1.23 times less return on investment than IShares MSCI. But when comparing it to its historical volatility, iShares Trust is 1.71 times less risky than IShares MSCI. It trades about 0.1 of its potential returns per unit of risk. iShares MSCI Netherlands is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 66,142 in iShares MSCI Netherlands on September 19, 2024 and sell it today you would earn a total of 30,177 from holding iShares MSCI Netherlands or generate 45.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.26% |
| Values | Daily Returns |
iShares Trust vs. iShares MSCI Netherlands
Performance |
| Timeline |
| iShares Trust |
| iShares MSCI Netherlands |
IShares Trust and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and IShares MSCI
The main advantage of trading using opposite IShares Trust and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, IShares 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 IShares MSCI will offset losses from the drop in IShares MSCI's long position.| IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust |
| IShares MSCI vs. iShares Trust | IShares MSCI vs. iShares Trust | IShares MSCI vs. iShares Trust | IShares MSCI vs. iShares Trust |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |