Correlation Between Main Thematic and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both Main Thematic 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 Main Thematic and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Main Thematic Innovation and iShares MSCI USA, you can compare the effects of market volatilities on Main Thematic 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 Main Thematic with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Main Thematic and IShares MSCI.
Diversification Opportunities for Main Thematic and IShares MSCI
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Main and IShares is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Main Thematic Innovation 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 Main Thematic 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 Main Thematic Innovation 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 Main Thematic i.e., Main Thematic and IShares MSCI go up and down completely randomly.
Pair Corralation between Main Thematic and IShares MSCI
Given the investment horizon of 90 days Main Thematic Innovation is expected to generate 1.33 times more return on investment than IShares MSCI. However, Main Thematic is 1.33 times more volatile than iShares MSCI USA. It trades about 0.07 of its potential returns per unit of risk. iShares MSCI USA is currently generating about 0.07 per unit of risk. If you would invest 1,418 in Main Thematic Innovation on September 1, 2024 and sell it today you would earn a total of 770.00 from holding Main Thematic Innovation or generate 54.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Main Thematic Innovation vs. iShares MSCI USA
Performance |
| Timeline |
| Main Thematic Innovation |
| iShares MSCI USA |
Main Thematic and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Main Thematic and IShares MSCI
The main advantage of trading using opposite Main Thematic and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Main Thematic 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.| Main Thematic vs. Main Sector Rotation | Main Thematic vs. Global X Thematic | Main Thematic vs. Franklin Exponential Data | Main Thematic vs. Goldman Sachs Innovate |
| IShares MSCI vs. iShares Equity Factor | IShares MSCI vs. iShares MSCI Emerging | IShares MSCI vs. iShares Edge MSCI | IShares MSCI vs. iShares MSCI USA |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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