Correlation Between Xtrackers MSCI and Inspire Global
Can any of the company-specific risk be diversified away by investing in both Xtrackers MSCI and Inspire Global 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 Xtrackers MSCI and Inspire Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers MSCI Kokusai and Inspire Global Hope, you can compare the effects of market volatilities on Xtrackers MSCI and Inspire Global 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 Xtrackers MSCI with a short position of Inspire Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers MSCI and Inspire Global.
Diversification Opportunities for Xtrackers MSCI and Inspire Global
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtrackers and Inspire is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI Kokusai and Inspire Global Hope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspire Global Hope and Xtrackers 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 Xtrackers MSCI Kokusai are associated (or correlated) with Inspire Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspire Global Hope has no effect on the direction of Xtrackers MSCI i.e., Xtrackers MSCI and Inspire Global go up and down completely randomly.
Pair Corralation between Xtrackers MSCI and Inspire Global
Given the investment horizon of 90 days Xtrackers MSCI Kokusai is expected to generate 1.02 times more return on investment than Inspire Global. However, Xtrackers MSCI is 1.02 times more volatile than Inspire Global Hope. It trades about 0.14 of its potential returns per unit of risk. Inspire Global Hope is currently generating about 0.09 per unit of risk. If you would invest 10,117 in Xtrackers MSCI Kokusai on August 30, 2024 and sell it today you would earn a total of 208.00 from holding Xtrackers MSCI Kokusai or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers MSCI Kokusai vs. Inspire Global Hope
Performance |
| Timeline |
| Xtrackers MSCI Kokusai |
| Inspire Global Hope |
Xtrackers MSCI and Inspire Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers MSCI and Inspire Global
The main advantage of trading using opposite Xtrackers MSCI and Inspire Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers MSCI position performs unexpectedly, Inspire Global 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 Inspire Global will offset losses from the drop in Inspire Global's long position.| Xtrackers MSCI vs. Mackenzie Canadian Equity | Xtrackers MSCI vs. Mackenzie Large Cap | Xtrackers MSCI vs. BMO MSCI EAFE | Xtrackers MSCI vs. BMO Long Federal |
| Inspire Global vs. Mackenzie Canadian Equity | Inspire Global vs. Mackenzie Large Cap | Inspire Global vs. BMO MSCI EAFE | Inspire Global vs. BMO Long Federal |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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