Correlation Between IShares JP and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both IShares JP 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 IShares JP and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares JP Morgan and iShares MSCI Europe, you can compare the effects of market volatilities on IShares JP 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 IShares JP with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares JP and IShares MSCI.
Diversification Opportunities for IShares JP and IShares MSCI
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between IShares and IShares is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding iShares JP Morgan and iShares MSCI Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Europe and IShares JP 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 JP Morgan 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 Europe has no effect on the direction of IShares JP i.e., IShares JP and IShares MSCI go up and down completely randomly.
Pair Corralation between IShares JP and IShares MSCI
Assuming the 90 days trading horizon iShares JP Morgan is expected to generate 0.59 times more return on investment than IShares MSCI. However, iShares JP Morgan is 1.7 times less risky than IShares MSCI. It trades about 0.13 of its potential returns per unit of risk. iShares MSCI Europe is currently generating about -0.18 per unit of risk. If you would invest 3,384 in iShares JP Morgan on August 24, 2024 and sell it today you would earn a total of 49.00 from holding iShares JP Morgan or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares JP Morgan vs. iShares MSCI Europe
Performance |
| Timeline |
| iShares JP Morgan |
| iShares MSCI Europe |
IShares JP and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares JP and IShares MSCI
The main advantage of trading using opposite IShares JP and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares JP 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.| IShares JP vs. Leverage Shares 3x | IShares JP vs. WisdomTree SP 500 | IShares JP vs. WisdomTree Silver 3x | IShares JP vs. Leverage Shares 3x |
| IShares MSCI vs. Leverage Shares 3x | IShares MSCI vs. WisdomTree SP 500 | IShares MSCI vs. WisdomTree Silver 3x | IShares MSCI vs. Leverage Shares 3x |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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