Correlation Between MSCI and Coinbase Global
Can any of the company-specific risk be diversified away by investing in both MSCI and Coinbase Global 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 MSCI and Coinbase Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MSCI Inc and Coinbase Global, you can compare the effects of market volatilities on MSCI and Coinbase Global 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 MSCI with a short position of Coinbase Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSCI and Coinbase Global.
Diversification Opportunities for MSCI and Coinbase Global
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MSCI and Coinbase is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding MSCI Inc and Coinbase Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coinbase Global and 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 MSCI Inc are associated (or correlated) with Coinbase Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coinbase Global has no effect on the direction of MSCI i.e., MSCI and Coinbase Global go up and down completely randomly.
Pair Corralation between MSCI and Coinbase Global
Given the investment horizon of 90 days MSCI Inc is expected to under-perform the Coinbase Global. But the stock apears to be less risky and, when comparing its historical volatility, MSCI Inc is 2.02 times less risky than Coinbase Global. The stock trades about -0.01 of its potential returns per unit of risk. The Coinbase Global is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 27,065 in Coinbase Global on November 4, 2024 and sell it today you would earn a total of 2,068 from holding Coinbase Global or generate 7.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MSCI Inc vs. Coinbase Global
Performance |
| Timeline |
| MSCI Inc |
| Coinbase Global |
MSCI and Coinbase Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MSCI and Coinbase Global
The main advantage of trading using opposite MSCI and Coinbase Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSCI position performs unexpectedly, Coinbase Global 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 Coinbase Global will offset losses from the drop in Coinbase Global's long position.The idea behind MSCI Inc and Coinbase Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Coinbase Global vs. Moodys | Coinbase Global vs. MSCI Inc | Coinbase Global vs. Intercontinental Exchange | Coinbase Global vs. CME Group |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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