Correlation Between IShares MSCI and IShares Paris
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and IShares Paris 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 IShares Paris 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 iShares Paris Aligned Climate, you can compare the effects of market volatilities on IShares MSCI and IShares Paris 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 IShares Paris. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and IShares Paris.
Diversification Opportunities for IShares MSCI and IShares Paris
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between IShares and IShares is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI China and iShares Paris Aligned Climate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Paris Aligned 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 IShares Paris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Paris Aligned has no effect on the direction of IShares MSCI i.e., IShares MSCI and IShares Paris go up and down completely randomly.
Pair Corralation between IShares MSCI and IShares Paris
Given the investment horizon of 90 days iShares MSCI China is expected to under-perform the IShares Paris. In addition to that, IShares MSCI is 3.07 times more volatile than iShares Paris Aligned Climate. It trades about -0.08 of its total potential returns per unit of risk. iShares Paris Aligned Climate is currently generating about -0.05 per unit of volatility. If you would invest 5,407 in iShares Paris Aligned Climate on September 2, 2024 and sell it today you would lose (42.00) from holding iShares Paris Aligned Climate or give up 0.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI China vs. iShares Paris Aligned Climate
Performance |
| Timeline |
| iShares MSCI China |
| iShares Paris Aligned |
IShares MSCI and IShares Paris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and IShares Paris
The main advantage of trading using opposite IShares MSCI and IShares Paris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, IShares Paris 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 IShares Paris will offset losses from the drop in IShares Paris' 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 |
| IShares Paris vs. iShares ESG Aggregate | IShares Paris vs. SPDR MSCI Emerging | IShares Paris vs. Aquagold International | IShares Paris vs. Thrivent High Yield |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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