Correlation Between IShares MSCI and IShares Core
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By analyzing existing cross correlation between iShares MSCI ACWI and iShares Core SP, you can compare the effects of market volatilities on IShares MSCI and IShares Core 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 IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and IShares Core.
Diversification Opportunities for IShares MSCI and IShares Core
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and IShares is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI ACWI and iShares Core SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core SP 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 ACWI are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core SP has no effect on the direction of IShares MSCI i.e., IShares MSCI and IShares Core go up and down completely randomly.
Pair Corralation between IShares MSCI and IShares Core
Assuming the 90 days trading horizon IShares MSCI is expected to generate 12.05 times less return on investment than IShares Core. But when comparing it to its historical volatility, iShares MSCI ACWI is 1.4 times less risky than IShares Core. It trades about 0.02 of its potential returns per unit of risk. iShares Core SP is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 22,733,000 in iShares Core SP on September 5, 2024 and sell it today you would earn a total of 477,000 from holding iShares Core SP or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI ACWI vs. iShares Core SP
Performance |
| Timeline |
| iShares MSCI ACWI |
| iShares Core SP |
IShares MSCI and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and IShares Core
The main advantage of trading using opposite IShares MSCI and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, IShares Core 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 Core will offset losses from the drop in IShares Core's long position.| IShares MSCI vs. Brainsway | IShares MSCI vs. Mivne Real Estate | IShares MSCI vs. Photomyne | IShares MSCI vs. Israel Land Development |
| IShares Core vs. iShares SP 500 | IShares Core vs. iShares MSCI ACWI | IShares Core vs. iShares NASDAQ 100 | IShares Core vs. iShares Healthcare Innovation |
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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