Correlation Between VanEck Israel and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both VanEck Israel 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 VanEck Israel and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Israel ETF and iShares MSCI Israel, you can compare the effects of market volatilities on VanEck Israel 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 VanEck Israel with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Israel and IShares MSCI.
Diversification Opportunities for VanEck Israel and IShares MSCI
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between VanEck and IShares is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Israel ETF and iShares MSCI Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Israel and VanEck Israel 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 VanEck Israel ETF 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 Israel has no effect on the direction of VanEck Israel i.e., VanEck Israel and IShares MSCI go up and down completely randomly.
Pair Corralation between VanEck Israel and IShares MSCI
Given the investment horizon of 90 days VanEck Israel is expected to generate 1.52 times less return on investment than IShares MSCI. But when comparing it to its historical volatility, VanEck Israel ETF is 1.06 times less risky than IShares MSCI. It trades about 0.03 of its potential returns per unit of risk. iShares MSCI Israel is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,734 in iShares MSCI Israel on August 30, 2024 and sell it today you would earn a total of 1,616 from holding iShares MSCI Israel or generate 28.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Israel ETF vs. iShares MSCI Israel
Performance |
| Timeline |
| VanEck Israel ETF |
| iShares MSCI Israel |
VanEck Israel and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Israel and IShares MSCI
The main advantage of trading using opposite VanEck Israel and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Israel 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.| VanEck Israel vs. iShares MSCI Ireland | VanEck Israel vs. iShares MSCI Israel | VanEck Israel vs. iShares MSCI Philippines | VanEck Israel vs. iShares MSCI Poland |
| IShares MSCI vs. iShares MSCI Thailand | IShares MSCI vs. iShares MSCI Ireland | IShares MSCI vs. iShares MSCI Netherlands | IShares MSCI vs. iShares MSCI New |
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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