Correlation Between IShares MSCI and REX FANG
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and REX FANG 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 REX FANG 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 REX FANG Innovation, you can compare the effects of market volatilities on IShares MSCI and REX FANG 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 REX FANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and REX FANG.
Diversification Opportunities for IShares MSCI and REX FANG
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between IShares and REX is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI China and REX FANG Innovation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REX FANG Innovation 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 REX FANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REX FANG Innovation has no effect on the direction of IShares MSCI i.e., IShares MSCI and REX FANG go up and down completely randomly.
Pair Corralation between IShares MSCI and REX FANG
Given the investment horizon of 90 days iShares MSCI China is expected to generate 1.33 times more return on investment than REX FANG. However, IShares MSCI is 1.33 times more volatile than REX FANG Innovation. It trades about 0.15 of its potential returns per unit of risk. REX FANG Innovation is currently generating about -0.02 per unit of risk. If you would invest 4,639 in iShares MSCI China on November 4, 2024 and sell it today you would earn a total of 202.00 from holding iShares MSCI China or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI China vs. REX FANG Innovation
Performance |
| Timeline |
| iShares MSCI China |
| REX FANG Innovation |
IShares MSCI and REX FANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and REX FANG
The main advantage of trading using opposite IShares MSCI and REX FANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, REX FANG 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 REX FANG will offset losses from the drop in REX FANG'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 |
| REX FANG vs. iShares Dividend and | REX FANG vs. Martin Currie Sustainable | REX FANG vs. VictoryShares THB Mid | REX FANG vs. Mast Global Battery |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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