Correlation Between IShares MSCI and First Trust
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and First Trust 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 First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI Kuwait and First Trust Global, you can compare the effects of market volatilities on IShares MSCI and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and First Trust.
Diversification Opportunities for IShares MSCI and First Trust
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and First is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Kuwait and First Trust Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Global 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 Kuwait are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Global has no effect on the direction of IShares MSCI i.e., IShares MSCI and First Trust go up and down completely randomly.
Pair Corralation between IShares MSCI and First Trust
Considering the 90-day investment horizon iShares MSCI Kuwait is expected to generate 0.36 times more return on investment than First Trust. However, iShares MSCI Kuwait is 2.76 times less risky than First Trust. It trades about 0.09 of its potential returns per unit of risk. First Trust Global is currently generating about -0.13 per unit of risk. If you would invest 3,199 in iShares MSCI Kuwait on August 30, 2024 and sell it today you would earn a total of 37.00 from holding iShares MSCI Kuwait or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI Kuwait vs. First Trust Global
Performance |
| Timeline |
| iShares MSCI Kuwait |
| First Trust Global |
IShares MSCI and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and First Trust
The main advantage of trading using opposite IShares MSCI and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| IShares MSCI vs. First Trust Global | IShares MSCI vs. VanEck UraniumNuclear Energy | IShares MSCI vs. Invesco Global Clean | IShares MSCI vs. Invesco Solar ETF |
| First Trust vs. Global X FinTech | First Trust vs. iShares Genomics Immunology | First Trust vs. ABIVAX Socit Anonyme | First Trust vs. HUMANA INC |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |