Correlation Between IShares Industrials and Fidelity MSCI
Can any of the company-specific risk be diversified away by investing in both IShares Industrials 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 Industrials 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 Industrials ETF and Fidelity MSCI Industrials, you can compare the effects of market volatilities on IShares Industrials 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 Industrials with a short position of Fidelity MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Industrials and Fidelity MSCI.
Diversification Opportunities for IShares Industrials and Fidelity MSCI
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Fidelity is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding iShares Industrials ETF 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 Industrials 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 Industrials ETF 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 Industrials i.e., IShares Industrials and Fidelity MSCI go up and down completely randomly.
Pair Corralation between IShares Industrials and Fidelity MSCI
Considering the 90-day investment horizon iShares Industrials ETF is expected to generate 1.02 times more return on investment than Fidelity MSCI. However, IShares Industrials is 1.02 times more volatile than Fidelity MSCI Industrials. It trades about -0.19 of its potential returns per unit of risk. Fidelity MSCI Industrials is currently generating about -0.21 per unit of risk. If you would invest 13,994 in iShares Industrials ETF on November 29, 2024 and sell it today you would lose (440.00) from holding iShares Industrials ETF or give up 3.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Industrials ETF vs. Fidelity MSCI Industrials
Performance |
| Timeline |
| iShares Industrials ETF |
| Fidelity MSCI Industrials |
IShares Industrials and Fidelity MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Industrials and Fidelity MSCI
The main advantage of trading using opposite IShares Industrials and Fidelity MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Industrials 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 Industrials vs. iShares Consumer Discretionary | IShares Industrials vs. iShares Consumer Staples | IShares Industrials vs. iShares Basic Materials | IShares Industrials vs. iShares Utilities ETF |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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