Correlation Between MSCI ACWI and Genworth Financial
Can any of the company-specific risk be diversified away by investing in both MSCI ACWI and Genworth Financial 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 ACWI and Genworth Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MSCI ACWI exAUCONSUMER and Genworth Financial, you can compare the effects of market volatilities on MSCI ACWI and Genworth Financial 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 ACWI with a short position of Genworth Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSCI ACWI and Genworth Financial.
Diversification Opportunities for MSCI ACWI and Genworth Financial
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MSCI and Genworth is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding MSCI ACWI exAUCONSUMER and Genworth Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genworth Financial and MSCI ACWI 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 ACWI exAUCONSUMER are associated (or correlated) with Genworth Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genworth Financial has no effect on the direction of MSCI ACWI i.e., MSCI ACWI and Genworth Financial go up and down completely randomly.
Pair Corralation between MSCI ACWI and Genworth Financial
Assuming the 90 days horizon MSCI ACWI is expected to generate 1.68 times less return on investment than Genworth Financial. But when comparing it to its historical volatility, MSCI ACWI exAUCONSUMER is 4.3 times less risky than Genworth Financial. It trades about 0.07 of its potential returns per unit of risk. Genworth Financial is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 623.00 in Genworth Financial on November 19, 2024 and sell it today you would earn a total of 106.00 from holding Genworth Financial or generate 17.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MSCI ACWI exAUCONSUMER vs. Genworth Financial
Performance |
| Timeline |
| MSCI ACWI exAUCONSUMER |
| Genworth Financial |
MSCI ACWI and Genworth Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MSCI ACWI and Genworth Financial
The main advantage of trading using opposite MSCI ACWI and Genworth Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSCI ACWI position performs unexpectedly, Genworth Financial 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 Genworth Financial will offset losses from the drop in Genworth Financial's long position.| MSCI ACWI vs. Harrow Health 8625 | MSCI ACWI vs. Babcock Wilcox Enterprises, | MSCI ACWI vs. Babcock Wilcox Enterprises | MSCI ACWI vs. Oxford Lane Capital |
| Genworth Financial vs. MetLife Preferred Stock | Genworth Financial vs. Prudential PLC ADR | Genworth Financial vs. Primerica | Genworth Financial vs. CNO Financial 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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