Correlation Between IShares Consumer and Fidelity MSCI
Can any of the company-specific risk be diversified away by investing in both IShares Consumer 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 Consumer 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 Consumer Staples and Fidelity MSCI Consumer, you can compare the effects of market volatilities on IShares Consumer 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 Consumer with a short position of Fidelity MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Consumer and Fidelity MSCI.
Diversification Opportunities for IShares Consumer and Fidelity MSCI
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and Fidelity is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding iShares Consumer Staples and Fidelity MSCI Consumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity MSCI Consumer and IShares Consumer 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 Consumer Staples 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 Consumer has no effect on the direction of IShares Consumer i.e., IShares Consumer and Fidelity MSCI go up and down completely randomly.
Pair Corralation between IShares Consumer and Fidelity MSCI
Considering the 90-day investment horizon IShares Consumer is expected to generate 1.2 times less return on investment than Fidelity MSCI. In addition to that, IShares Consumer is 1.07 times more volatile than Fidelity MSCI Consumer. It trades about 0.08 of its total potential returns per unit of risk. Fidelity MSCI Consumer is currently generating about 0.11 per unit of volatility. If you would invest 4,703 in Fidelity MSCI Consumer on August 24, 2024 and sell it today you would earn a total of 391.00 from holding Fidelity MSCI Consumer or generate 8.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Consumer Staples vs. Fidelity MSCI Consumer
Performance |
| Timeline |
| iShares Consumer Staples |
| Fidelity MSCI Consumer |
IShares Consumer and Fidelity MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Consumer and Fidelity MSCI
The main advantage of trading using opposite IShares Consumer and Fidelity MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Consumer 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 Consumer vs. iShares Consumer Discretionary | IShares Consumer vs. iShares Industrials ETF | IShares Consumer vs. iShares Utilities ETF | IShares Consumer vs. iShares Basic Materials |
| Fidelity MSCI vs. iShares Consumer Discretionary | Fidelity MSCI vs. iShares Industrials ETF | Fidelity MSCI vs. iShares Utilities ETF | Fidelity MSCI vs. iShares Basic Materials |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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