Correlation Between IShares MSCI and IShares Core
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and IShares Core 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 IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI Global and iShares Core CHF, you can compare the effects of market volatilities on IShares MSCI and IShares Core 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 IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and IShares Core.
Diversification Opportunities for IShares MSCI and IShares Core
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and IShares is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Global and iShares Core CHF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core CHF 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 Global are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core CHF has no effect on the direction of IShares MSCI i.e., IShares MSCI and IShares Core go up and down completely randomly.
Pair Corralation between IShares MSCI and IShares Core
Assuming the 90 days trading horizon iShares MSCI Global is expected to generate 8.09 times more return on investment than IShares Core. However, IShares MSCI is 8.09 times more volatile than iShares Core CHF. It trades about 0.07 of its potential returns per unit of risk. iShares Core CHF is currently generating about 0.07 per unit of risk. If you would invest 425.00 in iShares MSCI Global on October 11, 2024 and sell it today you would earn a total of 327.00 from holding iShares MSCI Global or generate 76.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI Global vs. iShares Core CHF
Performance |
| Timeline |
| iShares MSCI Global |
| iShares Core CHF |
IShares MSCI and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and IShares Core
The main advantage of trading using opposite IShares MSCI and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, IShares Core 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 Core will offset losses from the drop in IShares Core's long position.| IShares MSCI vs. iShares Corp Bond | IShares MSCI vs. iShares Emerging Asia | IShares MSCI vs. iShares VII PLC | IShares MSCI vs. iShares Asia Property |
| IShares Core vs. iShares Corp Bond | IShares Core vs. iShares Emerging Asia | IShares Core vs. iShares MSCI Global | IShares Core vs. iShares VII PLC |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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