Correlation Between IShares MSCI and Invesco India
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and Invesco India 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 Invesco India into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI India and Invesco India ETF, you can compare the effects of market volatilities on IShares MSCI and Invesco India 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 Invesco India. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Invesco India.
Diversification Opportunities for IShares MSCI and Invesco India
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Invesco is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI India and Invesco India ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco India ETF 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 India are associated (or correlated) with Invesco India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco India ETF has no effect on the direction of IShares MSCI i.e., IShares MSCI and Invesco India go up and down completely randomly.
Pair Corralation between IShares MSCI and Invesco India
Given the investment horizon of 90 days iShares MSCI India is expected to generate 1.37 times more return on investment than Invesco India. However, IShares MSCI is 1.37 times more volatile than Invesco India ETF. It trades about -0.04 of its potential returns per unit of risk. Invesco India ETF is currently generating about -0.06 per unit of risk. If you would invest 7,455 in iShares MSCI India on November 3, 2024 and sell it today you would lose (481.00) from holding iShares MSCI India or give up 6.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI India vs. Invesco India ETF
Performance |
| Timeline |
| iShares MSCI India |
| Invesco India ETF |
IShares MSCI and Invesco India Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and Invesco India
The main advantage of trading using opposite IShares MSCI and Invesco India positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, Invesco India 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 Invesco India will offset losses from the drop in Invesco India's long position.| IShares MSCI vs. Columbia India Consumer | IShares MSCI vs. iShares India 50 | IShares MSCI vs. iShares MSCI India | IShares MSCI vs. Invesco India ETF |
| Invesco India vs. WisdomTree India Earnings | Invesco India vs. iShares India 50 | Invesco India vs. iShares MSCI India | Invesco India vs. iShares MSCI Thailand |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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