Correlation Between IShares India and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both IShares India 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 India 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 India 50 and iShares MSCI India, you can compare the effects of market volatilities on IShares India 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 India with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares India and IShares MSCI.
Diversification Opportunities for IShares India and IShares MSCI
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and IShares is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares India 50 and iShares MSCI India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI India and IShares India 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 India 50 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 India has no effect on the direction of IShares India i.e., IShares India and IShares MSCI go up and down completely randomly.
Pair Corralation between IShares India and IShares MSCI
Given the investment horizon of 90 days iShares India 50 is expected to generate 1.04 times more return on investment than IShares MSCI. However, IShares India is 1.04 times more volatile than iShares MSCI India. It trades about -0.09 of its potential returns per unit of risk. iShares MSCI India is currently generating about -0.1 per unit of risk. If you would invest 5,349 in iShares India 50 on August 27, 2024 and sell it today you would lose (87.00) from holding iShares India 50 or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares India 50 vs. iShares MSCI India
Performance |
| Timeline |
| iShares India 50 |
| iShares MSCI India |
IShares India and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares India and IShares MSCI
The main advantage of trading using opposite IShares India and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares India 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 India vs. iShares MSCI India | IShares India vs. Invesco India ETF | IShares India vs. iShares MSCI India | IShares India vs. WisdomTree India Earnings |
| IShares MSCI vs. iShares India 50 | IShares MSCI vs. iShares MSCI China | IShares MSCI vs. VanEck Vietnam ETF | IShares MSCI 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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