Correlation Between IShares MSCI and Invesco Golden
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and Invesco Golden 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 Invesco Golden 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 Invesco Golden Dragon, you can compare the effects of market volatilities on IShares MSCI and Invesco Golden 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 Invesco Golden. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Invesco Golden.
Diversification Opportunities for IShares MSCI and Invesco Golden
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and Invesco is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI China and Invesco Golden Dragon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Golden Dragon 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 Invesco Golden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Golden Dragon has no effect on the direction of IShares MSCI i.e., IShares MSCI and Invesco Golden go up and down completely randomly.
Pair Corralation between IShares MSCI and Invesco Golden
Given the investment horizon of 90 days iShares MSCI China is expected to generate 0.96 times more return on investment than Invesco Golden. However, iShares MSCI China is 1.04 times less risky than Invesco Golden. It trades about 0.03 of its potential returns per unit of risk. Invesco Golden Dragon is currently generating about 0.02 per unit of risk. If you would invest 4,443 in iShares MSCI China on August 28, 2024 and sell it today you would earn a total of 195.00 from holding iShares MSCI China or generate 4.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI China vs. Invesco Golden Dragon
Performance |
| Timeline |
| iShares MSCI China |
| Invesco Golden Dragon |
IShares MSCI and Invesco Golden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and Invesco Golden
The main advantage of trading using opposite IShares MSCI and Invesco Golden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, Invesco Golden 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 Invesco Golden will offset losses from the drop in Invesco Golden'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 |
| Invesco Golden vs. iShares MSCI Singapore | Invesco Golden vs. iShares MSCI Malaysia | Invesco Golden vs. iShares MSCI Australia | Invesco Golden vs. iShares MSCI South |
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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