Correlation Between IShares Aerospace and Fidelity MSCI
Can any of the company-specific risk be diversified away by investing in both IShares Aerospace and Fidelity 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 Aerospace and Fidelity MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Aerospace Defense and Fidelity MSCI Industrials, you can compare the effects of market volatilities on IShares Aerospace and Fidelity 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 Aerospace with a short position of Fidelity MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Aerospace and Fidelity MSCI.
Diversification Opportunities for IShares Aerospace and Fidelity MSCI
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and Fidelity is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding iShares Aerospace Defense and Fidelity MSCI Industrials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity MSCI Industrials and IShares Aerospace 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 Aerospace Defense are associated (or correlated) with Fidelity MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity MSCI Industrials has no effect on the direction of IShares Aerospace i.e., IShares Aerospace and Fidelity MSCI go up and down completely randomly.
Pair Corralation between IShares Aerospace and Fidelity MSCI
Considering the 90-day investment horizon iShares Aerospace Defense is expected to generate 1.19 times more return on investment than Fidelity MSCI. However, IShares Aerospace is 1.19 times more volatile than Fidelity MSCI Industrials. It trades about 0.35 of its potential returns per unit of risk. Fidelity MSCI Industrials is currently generating about 0.28 per unit of risk. If you would invest 14,486 in iShares Aerospace Defense on November 3, 2024 and sell it today you would earn a total of 1,236 from holding iShares Aerospace Defense or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Aerospace Defense vs. Fidelity MSCI Industrials
Performance |
| Timeline |
| iShares Aerospace Defense |
| Fidelity MSCI Industrials |
IShares Aerospace and Fidelity MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Aerospace and Fidelity MSCI
The main advantage of trading using opposite IShares Aerospace and Fidelity MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Aerospace position performs unexpectedly, Fidelity 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 Fidelity MSCI will offset losses from the drop in Fidelity MSCI's long position.| IShares Aerospace vs. SPDR SP Aerospace | IShares Aerospace vs. Invesco Aerospace Defense | IShares Aerospace vs. iShares Medical Devices | IShares Aerospace vs. iShares Expanded Tech Software |
| Fidelity MSCI vs. Fidelity MSCI Materials | Fidelity MSCI vs. Fidelity MSCI Financials | Fidelity MSCI vs. Fidelity MSCI Consumer | Fidelity MSCI vs. Fidelity MSCI Consumer |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |