Correlation Between IShares MSCI and Macquarie ETF
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and Macquarie ETF 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 Macquarie ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI China and Macquarie ETF Trust, you can compare the effects of market volatilities on IShares MSCI and Macquarie ETF 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 Macquarie ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Macquarie ETF.
Diversification Opportunities for IShares MSCI and Macquarie ETF
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between IShares and Macquarie is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI China and Macquarie ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie ETF Trust 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 China are associated (or correlated) with Macquarie ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie ETF Trust has no effect on the direction of IShares MSCI i.e., IShares MSCI and Macquarie ETF go up and down completely randomly.
Pair Corralation between IShares MSCI and Macquarie ETF
Given the investment horizon of 90 days iShares MSCI China is expected to generate 2.09 times more return on investment than Macquarie ETF. However, IShares MSCI is 2.09 times more volatile than Macquarie ETF Trust. It trades about 0.01 of its potential returns per unit of risk. Macquarie ETF Trust is currently generating about 0.01 per unit of risk. If you would invest 4,695 in iShares MSCI China on November 9, 2024 and sell it today you would earn a total of 217.00 from holding iShares MSCI China or generate 4.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 60.45% |
| Values | Daily Returns |
iShares MSCI China vs. Macquarie ETF Trust
Performance |
| Timeline |
| iShares MSCI China |
| Macquarie ETF Trust |
IShares MSCI and Macquarie ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and Macquarie ETF
The main advantage of trading using opposite IShares MSCI and Macquarie ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, Macquarie ETF 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 Macquarie ETF will offset losses from the drop in Macquarie ETF's long position.| IShares MSCI vs. KraneShares CSI China | IShares MSCI vs. Invesco China Technology | IShares MSCI vs. iShares MSCI India | IShares MSCI vs. Xtrackers Harvest CSI |
| Macquarie ETF vs. Freedom Day Dividend | Macquarie ETF vs. Franklin Templeton ETF | Macquarie ETF vs. iShares MSCI China | Macquarie ETF vs. Tidal Trust II |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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