Correlation Between IShares MSCI and ETF Series
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and ETF Series 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 ETF Series 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 ETF Series Solutions, you can compare the effects of market volatilities on IShares MSCI and ETF Series 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 ETF Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and ETF Series.
Diversification Opportunities for IShares MSCI and ETF Series
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between IShares and ETF is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI China and ETF Series Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Series Solutions 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 ETF Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Series Solutions has no effect on the direction of IShares MSCI i.e., IShares MSCI and ETF Series go up and down completely randomly.
Pair Corralation between IShares MSCI and ETF Series
Given the investment horizon of 90 days IShares MSCI is expected to generate 1.9 times less return on investment than ETF Series. In addition to that, IShares MSCI is 1.9 times more volatile than ETF Series Solutions. It trades about 0.01 of its total potential returns per unit of risk. ETF Series Solutions is currently generating about 0.05 per unit of volatility. If you would invest 2,425 in ETF Series Solutions on September 14, 2024 and sell it today you would earn a total of 263.00 from holding ETF Series Solutions or generate 10.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 47.37% |
| Values | Daily Returns |
iShares MSCI China vs. ETF Series Solutions
Performance |
| Timeline |
| iShares MSCI China |
| ETF Series Solutions |
IShares MSCI and ETF Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and ETF Series
The main advantage of trading using opposite IShares MSCI and ETF Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, ETF Series 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 ETF Series will offset losses from the drop in ETF Series' 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 |
| ETF Series vs. SPDR Bloomberg Barclays | ETF Series vs. SPDR SSGA Fixed | ETF Series vs. SPDR DoubleLine Short | ETF Series vs. SPDR Portfolio Corporate |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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