Correlation Between IShares MSCI and USCF ETF
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and USCF 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 USCF 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 USCF ETF Trust, you can compare the effects of market volatilities on IShares MSCI and USCF 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 USCF ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and USCF ETF.
Diversification Opportunities for IShares MSCI and USCF ETF
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and USCF is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI China and USCF ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USCF 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 USCF ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USCF ETF Trust has no effect on the direction of IShares MSCI i.e., IShares MSCI and USCF ETF go up and down completely randomly.
Pair Corralation between IShares MSCI and USCF ETF
Given the investment horizon of 90 days iShares MSCI China is expected to generate 2.41 times more return on investment than USCF ETF. However, IShares MSCI is 2.41 times more volatile than USCF ETF Trust. It trades about 0.28 of its potential returns per unit of risk. USCF ETF Trust is currently generating about 0.21 per unit of risk. If you would invest 4,602 in iShares MSCI China on November 2, 2024 and sell it today you would earn a total of 341.00 from holding iShares MSCI China or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI China vs. USCF ETF Trust
Performance |
| Timeline |
| iShares MSCI China |
| USCF ETF Trust |
IShares MSCI and USCF ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and USCF ETF
The main advantage of trading using opposite IShares MSCI and USCF ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, USCF 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 USCF ETF will offset losses from the drop in USCF 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 |
| USCF ETF vs. Freedom Day Dividend | USCF ETF vs. Franklin Templeton ETF | USCF ETF vs. iShares MSCI China | USCF ETF 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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