Correlation Between IShares MSCI and T REX
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and T REX 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 T REX 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 T REX 2X Long, you can compare the effects of market volatilities on IShares MSCI and T REX 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 T REX. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and T REX.
Diversification Opportunities for IShares MSCI and T REX
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and MSTU is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI China and T REX 2X Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T REX 2X 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 T REX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T REX 2X has no effect on the direction of IShares MSCI i.e., IShares MSCI and T REX go up and down completely randomly.
Pair Corralation between IShares MSCI and T REX
Given the investment horizon of 90 days IShares MSCI is expected to generate 15.7 times less return on investment than T REX. But when comparing it to its historical volatility, iShares MSCI China is 6.84 times less risky than T REX. It trades about 0.06 of its potential returns per unit of risk. T REX 2X Long is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 12,660 in T REX 2X Long on September 14, 2024 and sell it today you would earn a total of 2,699 from holding T REX 2X Long or generate 21.32% 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. T REX 2X Long
Performance |
| Timeline |
| iShares MSCI China |
| T REX 2X |
IShares MSCI and T REX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and T REX
The main advantage of trading using opposite IShares MSCI and T REX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, T REX 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 T REX will offset losses from the drop in T REX'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 |
| T REX vs. Freedom Day Dividend | T REX vs. Franklin Templeton ETF | T REX vs. iShares MSCI China | T REX 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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