Correlation Between IShares MSCI and Putnam ETF
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and Putnam 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 Putnam 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 Putnam ETF Trust, you can compare the effects of market volatilities on IShares MSCI and Putnam 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 Putnam ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Putnam ETF.
Diversification Opportunities for IShares MSCI and Putnam ETF
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and Putnam is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI China and Putnam ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam 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 Putnam ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam ETF Trust has no effect on the direction of IShares MSCI i.e., IShares MSCI and Putnam ETF go up and down completely randomly.
Pair Corralation between IShares MSCI and Putnam ETF
Given the investment horizon of 90 days iShares MSCI China is expected to generate 6.78 times more return on investment than Putnam ETF. However, IShares MSCI is 6.78 times more volatile than Putnam ETF Trust. It trades about 0.04 of its potential returns per unit of risk. Putnam ETF Trust is currently generating about 0.09 per unit of risk. If you would invest 4,379 in iShares MSCI China on September 1, 2024 and sell it today you would earn a total of 353.00 from holding iShares MSCI China or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
iShares MSCI China vs. Putnam ETF Trust
Performance |
| Timeline |
| iShares MSCI China |
| Putnam ETF Trust |
IShares MSCI and Putnam ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and Putnam ETF
The main advantage of trading using opposite IShares MSCI and Putnam ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, Putnam 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 Putnam ETF will offset losses from the drop in Putnam 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 |
| Putnam ETF vs. Schwab International Equity | Putnam ETF vs. Schwab Emerging Markets | Putnam ETF vs. Schwab Short Term Treasury | Putnam ETF vs. Schwab TIPS ETF |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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