Correlation Between NBI Liquid and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both NBI Liquid and IShares MSCI 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 NBI Liquid and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NBI Liquid Alternatives and iShares MSCI USA, you can compare the effects of market volatilities on NBI Liquid and IShares MSCI 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 NBI Liquid with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBI Liquid and IShares MSCI.
Diversification Opportunities for NBI Liquid and IShares MSCI
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NBI and IShares is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding NBI Liquid Alternatives and iShares MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI USA and NBI Liquid 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 NBI Liquid Alternatives are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI USA has no effect on the direction of NBI Liquid i.e., NBI Liquid and IShares MSCI go up and down completely randomly.
Pair Corralation between NBI Liquid and IShares MSCI
Assuming the 90 days trading horizon NBI Liquid is expected to generate 6.52 times less return on investment than IShares MSCI. But when comparing it to its historical volatility, NBI Liquid Alternatives is 1.3 times less risky than IShares MSCI. It trades about 0.05 of its potential returns per unit of risk. iShares MSCI USA is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,849 in iShares MSCI USA on November 3, 2024 and sell it today you would earn a total of 152.00 from holding iShares MSCI USA or generate 5.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NBI Liquid Alternatives vs. iShares MSCI USA
Performance |
| Timeline |
| NBI Liquid Alternatives |
| iShares MSCI USA |
NBI Liquid and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NBI Liquid and IShares MSCI
The main advantage of trading using opposite NBI Liquid and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBI Liquid position performs unexpectedly, IShares MSCI 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 IShares MSCI will offset losses from the drop in IShares MSCI's long position.| NBI Liquid vs. AGFiQ Market Neutral | NBI Liquid vs. Picton Mahoney Fortified | NBI Liquid vs. Purpose Diversified Real | NBI Liquid vs. Desjardins Alt LongShort |
| IShares MSCI vs. iShares SPTSX 60 | IShares MSCI vs. iShares Core SP | IShares MSCI vs. iShares Core SPTSX | IShares MSCI vs. BMO Aggregate Bond |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |