Correlation Between IShares Core and Source JPX
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By analyzing existing cross correlation between iShares Core MSCI and Source JPX Nikkei 400, you can compare the effects of market volatilities on IShares Core and Source JPX 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 Core with a short position of Source JPX. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Source JPX.
Diversification Opportunities for IShares Core and Source JPX
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Source is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and Source JPX Nikkei 400 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Source JPX Nikkei and IShares Core 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 Core MSCI are associated (or correlated) with Source JPX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Source JPX Nikkei has no effect on the direction of IShares Core i.e., IShares Core and Source JPX go up and down completely randomly.
Pair Corralation between IShares Core and Source JPX
Assuming the 90 days trading horizon IShares Core is expected to generate 2.14 times less return on investment than Source JPX. But when comparing it to its historical volatility, iShares Core MSCI is 1.25 times less risky than Source JPX. It trades about 0.05 of its potential returns per unit of risk. Source JPX Nikkei 400 is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,937 in Source JPX Nikkei 400 on September 3, 2024 and sell it today you would earn a total of 1,005 from holding Source JPX Nikkei 400 or generate 51.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core MSCI vs. Source JPX Nikkei 400
Performance |
| Timeline |
| iShares Core MSCI |
| Source JPX Nikkei |
IShares Core and Source JPX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Source JPX
The main advantage of trading using opposite IShares Core and Source JPX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Source JPX 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 Source JPX will offset losses from the drop in Source JPX's long position.| IShares Core vs. iShares Govt Bond | IShares Core vs. iShares Global AAA AA | IShares Core vs. iShares Smart City | IShares Core vs. iShares Broad High |
| Source JPX vs. UBS Fund Solutions | Source JPX vs. Xtrackers II | Source JPX vs. Xtrackers Nikkei 225 | Source JPX vs. iShares VII PLC |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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