Correlation Between IShares MSCI and SoFi Select
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and SoFi Select 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 SoFi Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI USA and SoFi Select 500, you can compare the effects of market volatilities on IShares MSCI and SoFi Select 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 SoFi Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and SoFi Select.
Diversification Opportunities for IShares MSCI and SoFi Select
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and SoFi is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI USA and SoFi Select 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoFi Select 500 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 USA are associated (or correlated) with SoFi Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SoFi Select 500 has no effect on the direction of IShares MSCI i.e., IShares MSCI and SoFi Select go up and down completely randomly.
Pair Corralation between IShares MSCI and SoFi Select
Given the investment horizon of 90 days IShares MSCI is expected to generate 1.18 times less return on investment than SoFi Select. In addition to that, IShares MSCI is 1.1 times more volatile than SoFi Select 500. It trades about 0.09 of its total potential returns per unit of risk. SoFi Select 500 is currently generating about 0.11 per unit of volatility. If you would invest 6,793 in SoFi Select 500 on August 30, 2024 and sell it today you would earn a total of 4,285 from holding SoFi Select 500 or generate 63.08% 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 USA vs. SoFi Select 500
Performance |
| Timeline |
| iShares MSCI USA |
| SoFi Select 500 |
IShares MSCI and SoFi Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and SoFi Select
The main advantage of trading using opposite IShares MSCI and SoFi Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, SoFi Select 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 SoFi Select will offset losses from the drop in SoFi Select's long position.| IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. iShares Expanded Tech Software |
| SoFi Select vs. Berry Petroleum Corp | SoFi Select vs. Comstock Resources | SoFi Select vs. SoFi Next 500 | SoFi Select vs. SM Energy Co |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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