Correlation Between IShares SP and ProShares MSCI
Can any of the company-specific risk be diversified away by investing in both IShares SP and ProShares 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 SP and ProShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SP 500 and ProShares MSCI Transformational, you can compare the effects of market volatilities on IShares SP and ProShares 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 SP with a short position of ProShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and ProShares MSCI.
Diversification Opportunities for IShares SP and ProShares MSCI
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and ProShares is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP 500 and ProShares MSCI Transformationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares MSCI Trans and IShares SP 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 SP 500 are associated (or correlated) with ProShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares MSCI Trans has no effect on the direction of IShares SP i.e., IShares SP and ProShares MSCI go up and down completely randomly.
Pair Corralation between IShares SP and ProShares MSCI
Considering the 90-day investment horizon IShares SP is expected to generate 1.03 times less return on investment than ProShares MSCI. In addition to that, IShares SP is 1.52 times more volatile than ProShares MSCI Transformational. It trades about 0.09 of its total potential returns per unit of risk. ProShares MSCI Transformational is currently generating about 0.14 per unit of volatility. If you would invest 4,512 in ProShares MSCI Transformational on August 26, 2024 and sell it today you would earn a total of 102.00 from holding ProShares MSCI Transformational or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SP 500 vs. ProShares MSCI Transformationa
Performance |
| Timeline |
| iShares SP 500 |
| ProShares MSCI Trans |
IShares SP and ProShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SP and ProShares MSCI
The main advantage of trading using opposite IShares SP and ProShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SP position performs unexpectedly, ProShares 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 ProShares MSCI will offset losses from the drop in ProShares MSCI's long position.| IShares SP vs. Invesco Dynamic Large | IShares SP vs. Perella Weinberg Partners | IShares SP vs. HUMANA INC | IShares SP vs. Aquagold International |
| ProShares MSCI vs. Invesco Dynamic Large | ProShares MSCI vs. Perella Weinberg Partners | ProShares MSCI vs. HUMANA INC | ProShares MSCI vs. Aquagold International |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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