Correlation Between IShares MSCI and VanEck Solana
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and VanEck Solana 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 MSCI and VanEck Solana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI World and VanEck Solana ETN, you can compare the effects of market volatilities on IShares MSCI and VanEck Solana 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 VanEck Solana. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and VanEck Solana.
Diversification Opportunities for IShares MSCI and VanEck Solana
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and VanEck is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI World and VanEck Solana ETN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Solana ETN 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 World are associated (or correlated) with VanEck Solana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Solana ETN has no effect on the direction of IShares MSCI i.e., IShares MSCI and VanEck Solana go up and down completely randomly.
Pair Corralation between IShares MSCI and VanEck Solana
Assuming the 90 days trading horizon IShares MSCI is expected to generate 10.51 times less return on investment than VanEck Solana. But when comparing it to its historical volatility, iShares MSCI World is 8.06 times less risky than VanEck Solana. It trades about 0.1 of its potential returns per unit of risk. VanEck Solana ETN is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 74.00 in VanEck Solana ETN on August 26, 2024 and sell it today you would earn a total of 1,305 from holding VanEck Solana ETN or generate 1763.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 92.49% |
| Values | Daily Returns |
iShares MSCI World vs. VanEck Solana ETN
Performance |
| Timeline |
| iShares MSCI World |
| VanEck Solana ETN |
IShares MSCI and VanEck Solana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and VanEck Solana
The main advantage of trading using opposite IShares MSCI and VanEck Solana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, VanEck Solana 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 VanEck Solana will offset losses from the drop in VanEck Solana's long position.| IShares MSCI vs. Vanguard SP 500 | IShares MSCI vs. SPDR Dow Jones | IShares MSCI vs. iShares SP 500 | IShares MSCI vs. Vanguard FTSE All World |
| VanEck Solana vs. Vanguard SP 500 | VanEck Solana vs. SPDR Dow Jones | VanEck Solana vs. iShares Core MSCI | VanEck Solana vs. iShares SP 500 |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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